The FTSE 100 opened Friday with a modest rise, supported by strength in hospitality and consumer stocks even as pharmaceutical majors came under pressure following news of fresh US import tariffs. London’s blue-chip index climbed 0.1% or 14.74 points to 9228.72, reflecting cautious investor sentiment amid global uncertainty.
Among the biggest gainers, Intercontinental Hotels Group (IHG) rose £216, or 2.46%, to £8,990, which is positive news for the travel and leisure sector.
ConvaTec Group (CTEC), a maker of medical products, gained £3 (1.36%) to £224.20, and Croda International (CRDA), a chemicals company, increased £34 (1.28%) to £2,698.
Shell (SHEL), an energy conglomerate, added £33.50 (1.24%) to £2,732.50 as crude oil prices stayed largely unchanged.
Hotel and consumer stocks soared as a result of the ongoing strong demand trends, while the value of commodity and pharmaceutical shares lagged.
AstraZeneca fell £92 to £10,864 and GSK slipped £8.5 to £1,462, despite both companies planning significant investments in the US that may shield them from the 100% import tariffs on branded and patented medicines announced by President Trump.
The sector remains under scrutiny as investors weigh the long-term impact of potential trade barriers on earnings.
The muted tone in London reflects the weakness seen across Wall Street earlier in the week, with analysts saying concerns over US equity highs and rising bond yields have carried over to the European trading session. The US 10-year Treasury yield has edged up to 4.767%, while the pound steadied at $1.335.
Attention now shifts to the release of the US personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation measure. Consensus expects the annual core PCE to hold at 2.9%, a figure that could influence expectations for rate cuts later this year.
Richard Hunter of Interactive Investor commented that if the PCE numbers come in softer than expected, markets may take it as a sign that productivity gains are containing inflation, potentially boosting investor sentiment.
In the FTSE 250, Pennon Group, owner of South West Water, announced it expects a 60% year-on-year increase in earnings despite elevated costs from this summer’s heatwave.
The company highlighted progress in reducing pollution incidents and storm overflow spills, while continuing to advance its £3.2 billion investment plan.
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With investors cautious ahead of US data and geopolitical trade tensions, the FTSE 100’s early gains highlight resilience in the hospitality and energy sectors. However, the drag from pharmaceuticals and miners underscores the uneven performance likely to persist until clarity emerges on tariffs and US monetary policy.