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The FTSE 100 opened steady on Wednesday, holding ground after posting a record close in the previous session. Investors balanced optimism from strong corporate updates with caution as the US government entered its first shutdown in seven years.
London’s blue-chip index rose by 16.87 points, or 0.2%, to 9367.30, supported primarily by pharmaceutical and financial stocks. Tuesday’s rally marked the FTSE 100’s best quarter since late 2022, with gains of 6.7% over the three months.
Pharma shares were in sharp focus. AstraZeneca gained 5% to £11,704, extending its rally after optimism surrounding direct-to-consumer drug sales in the US.
Hikma Pharmaceuticals advanced 2.18% to £1735, up £37, while GSK rose 1.14% to £1592.5, gaining £18. The sector benefited from President Trump’s announcement of a government-backed website to allow Americans to purchase drugs directly from manufacturers.
Financial stocks also lent support. London Stock Exchange Group rose 1.15% to £8614, up £98, reflecting investor confidence in exchange services amid heightened global volatility.
JD Sports Fashion climbed 0.94% to £96.20, adding £0.90, reversing part of its recent weakness.
Among mid-cap stocks, Greggs surged 6% to £1703.7 after issuing a reassuring trading update, helping the FTSE 250 outperform. Meanwhile, Diageo added £35.5 to £1811 as steady consumer demand underpinned sentiment.
Tate & Lyle tumbled 9% to £406.8 after issuing a profit warning, cutting its full-year guidance due to slowing demand.
Homebuilder Taylor Wimpey edged £0.4 higher to £103.45, but its sales rate fell amid budget uncertainty, with management warning of subdued demand until November’s policy announcements.
Medical device firm Convatec unveiled a $1 billion investment plan, including £500 million for a new Manchester R&D hub, a boost for the UK’s life sciences sector.
The US government shutdown has added an element of uncertainty. Wall Street futures traded about 0.6% lower, but analysts dismissed the longer-term implications, as past shutdowns have had only short-term economic effects.
The primary risk for markets is the delay in economic data releases in the US, which could affect the Federal Reserve decisions on interest rates.
In the UK, the Institute of Directors says business confidence has fallen to its lowest level in nine years as higher prices dampen confidence. The housing market is more stable, with Nationwide reporting a 0.5% increase in average house prices in September to £271,995.
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Despite continued fears around the US shutdown, the FTSE 100 is still fueled by strength in pharmaceuticals, consumer names, and select corporate news. With the index being above 9300, investors will be paying attention to whether momentum can sustain till the last quarter of 2025.
