Source: Sharecast
The FTSE 100 ended up 1% to 9,446.43.
Chris Beauchamp, chief market analyst at IG, said: "Pharma stocks have injected new life into the FTSE 100’s rally this week, with today’s gains complemented by a surge for JD Sports after Nike’s earnings last night.
"Investors have taken news that the sector will sell direct to US citizens as a way of turbocharging earnings overall, rather than worrying about the impact of reduced prices."
Investors took the shutdown of the US federal government in their stride, while a much weaker-than-expected ADP report cemented expectations of a rate cut from the Federal Reserve later this month.
The report showed that private sector employment declined by 32,000 in September from August, versus expectations for a 45,000 increase. Meanwhile, the August figure was revised to show that 3,000 jobs were lost rather than 54,000 created.
Small businesses with fewer than 50 employees shed 40,000 jobs, while medium businesses with between 50 and 499 employees lost 20,000 jobs. Large business with more than 500 employees added 33,000 jobs.
The service sector saw a 28,000 drop in jobs, while the goods-producing sector shed 3,000 jobs.
Beauchamp said: "Once more bad news is good news it seems, after another shocker on employment data, this time from the ADP survey. Job growth in the US seems to have reached a nadir, and it is this that will have the Fed worrying that the current pace of cuts is not sufficient. The calls for a 50bps move will grow louder from here."
On home turf, a survey showed that activity in the manufacturing sector contracted at the fastest pace in five months September.
The S&P Global manufacturing purchasing managers’ index dropped to 46.2 from 47.0 in August, remaining below the 50.0 mark that separates contraction from expansion for the twelfth month in a row.
S&P noted that four of the five PMI components - output, new orders, employment and stocks of purchases - were consistent with a deterioration of operating conditions.
Meanwhile, the latest data from Nationwide showed that house prices nudged higher in September, as the market continued to shake off wider economic uncertainty.
In equity markets, pharmaceuticals were the standout gainers, with AstraZeneca, Hikma, GSK and Oxford Biomedica all higher.
The gains came after US President Trump announced a pricing deal with Pfizer that will see the pharmaceutical firm cut prescription drug prices for Medicaid in return for some tariff relief, and announced the launch of a government-run website for consumers to buy drugs directly from manufacturers.
Kathleen Brooks, research director at XTB, said: "Tariffs is the theme that won’t go away, and when the tariff news is positive, this is good for the FTSE 100 due to its international flavour. Thus, signs that President Trump is willing to forego tariff revenue for domestic pricing deals, is seen as positive for the sector.
"The Pfizer news highlights the transactional nature of the President’s tariff policies. Even though he threatened 100% tariffs on pharma imports last week, the Pfizer news shows that deals can still be made.
"Added to this, the US has unveiled a new drug buying site, TrumpRX, which has also excited investors. It is difficult to see how this new website will impact pharma company revenues, and we think that the tariff reprieve for Pfizer will have a longer-term impact on the pharma sector."
JD Sports rallied after Nike’s first-quarter earnings beat expectations.
Greggs surged as the bakery chain Greggs reported a slowdown in sales, pinning the blame partly on a "heat-affected" July, but reiterated its outlook for the full year.
Dan Coatsworth, head of markets at AJ Bell, said: "The fact life hasn’t got any worse for Greggs was enough to breathe some life into the share price. It says trading has improved over the past few months, it is getting cost pressures under control, and full-year guidance has been maintained.
"Don’t be fooled into thinking the king of sausage rolls is sitting upright on its throne, with nothing to worry about. The share price jump is a mixture of relief and a short squeeze, not a celebration of significant progress."
He said LFL sales are "still pedestrian" and there is "a nagging feeling that Greggs is growing too fast in the face of fierce headwinds".
Taylor Wimpey nudged up as the housebuilder reiterated its guidance for 2025 after a "robust" sales performance over the third quarter, but said it was mindful of various issues currently affecting customer sentiment, such as the impact of the delayed autumn budget.
Tate & Lyle tanked as it downgraded its full-year profit and revenue expectations, while Howden Joinery fell after shareholder Invesco Asset Management placed about 20.1m shares in the company at 825p each.
Market Movers
FTSE 100 (UKX) 9,446.43 1.03%
FTSE 250 (MCX) 22,021.37 0.03%
techMARK (TASX) 5,554.06 1.86%
FTSE 100 - Risers
AstraZeneca (AZN) 12,436.00p 11.21%
JD Sports Fashion (JD.) 101.80p 6.82%
GSK (GSK) 1,671.50p 6.16%
Hikma Pharmaceuticals (HIK) 1,795.00p 5.71%
Melrose Industries (MRO) 630.80p 3.61%
Smurfit Westrock (DI) (SWR) 3,208.00p 2.95%
Land Securities Group (LAND) 597.50p 2.66%
Centrica (CNA) 170.80p 2.52%
Croda International (CRDA) 2,769.00p 2.40%
Standard Chartered (STAN) 1,467.00p 2.19%
FTSE 100 - Fallers
Babcock International Group (BAB) 1,280.00p -3.76%
Tesco (TSCO) 429.70p -3.55%
Coca-Cola HBC AG (CDI) (CCH) 3,394.00p -3.14%
Games Workshop Group (GAW) 14,200.00p -2.27%
Imperial Brands (IMB) 3,091.00p -2.12%
Antofagasta (ANTO) 2,700.00p -1.85%
Auto Trader Group (AUTO) 774.00p -1.80%
International Consolidated Airlines Group SA (CDI) (IAG) 379.40p -1.74%
Relx plc (REL) 3,498.00p -1.66%
Beazley (BEZ) 894.00p -1.43%
FTSE 250 - Risers
Greggs (GRG) 1,706.00p 6.36%
Discoverie Group (DSCV) 630.00p 6.06%
Oxford Biomedica (OXB) 590.00p 5.73%
Hochschild Mining (HOC) 372.60p 4.84%
Genus (GNS) 2,480.00p 4.64%
Safestore Holdings (SAFE) 682.50p 3.72%
Travis Perkins (TPK) 632.50p 3.60%
Oxford Nanopore Technologies (ONT) 157.20p 3.22%
Ocado Group (OCDO) 231.60p 2.93%
Big Yellow Group (BYG) 999.00p 2.78%
FTSE 250 - Fallers
Tate & Lyle (TATE) 391.00p -13.03%
AJ Bell (AJB) 520.00p -3.97%
W.A.G Payment Solutions (EWG) 94.00p -3.89%
Premier Foods (PFD) 185.00p -3.65%
QinetiQ Group (QQ.) 531.50p -3.28%
Wetherspoon (J.D.) (JDW) 663.50p -2.64%
Grainger (GRI) 189.00p -2.58%
IP Group (IPO) 52.40p -2.42%
Me Group International (MEGP) 180.80p -2.38%
Trustpilot Group (TRST) 221.20p -2.30%
