London FTSE 100 heads for first monthly gain in three months as AstraZeneca lifts pharma stocks

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Highlights

AstraZeneca rises 3.6% after announcing a restructuring drive to save $1.5 billion, lifting pharma stocks for their best month since February.
FTSE 100 gains 1.3% in October, buoyed by milder-than-expected tax measures in John Healey's budget and strength in defence and consumer staples stocks.
NatWest drops 7.9% on weak Q3 profit, miners fall as gold and copper retreat, while rising oil prices support energy stocks with Brent crude above $117.

Pharma strength and budget relief support blue chips

As reported by Reuters, London's FTSE 100 is up 0.1% at 10,732.58 by 0941 GMT on Friday, putting the index on course for its first monthly gain in three months, with a 1.3% rise for October so far. The FTSE 250, by contrast, is down 0.6%.

AstraZeneca is rising 3.6% after the Anglo-Swedish drugmaker announces a restructuring drive expected to save $1.5 billion and support its long-term ambitions, including investment in new drug pipelines. The broader pharmaceutical sector gains 3%, setting it up for its biggest monthly advance since February.

Investors are also responding to John Healey's first budget, which raises taxes on banks and gambling companies but less aggressively than expected. That lighter tax burden helps trigger a rally in those stocks earlier in the week, while defence names also strengthen after Healey says reprioritisation in other departments will fund the government's defence plan.

Banks, miners and inflation outlook shape market moves

Banks are the biggest drag on the main index on Friday, led by NatWest, which falls 7.9% after disappointing third-quarter profit. Precious and industrial metal miners also decline, down 3.4% and 1.3% respectively, as gold and copper prices retreat.

Oil prices rise about 2% on Friday and are set for a fourth monthly gain, with Brent crude futures trading above $117 a barrel. The energy sector adds 0.2%, while BP edges higher after posting record quarterly net profit.

Consumer staples offer another area of support, with British American Tobacco and Unilever both up about 2%. Earlier this month, data shows inflation rises more than expected in September, reinforcing expectations for a Bank of England interest rate increase in November.

Our earlier coverage of Bank of England rate expectations highlighted how sticky inflation and firmer UK data were pushing economists to anticipate a November hike, with many seeing Bank Rate moving up to 4.0%. It also noted that, despite limited pass-through from recent energy moves so far, policymakers were signaling readiness to tighten if price pressures persist.

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