Astrazeneca results, rate cut bets power FTSE 100 to record close (updated)

Astrazeneca Pharma India

06/02/2025 17:19

* 
      FTSE 100 up 1.2%, FTMC up 1%
    

        * 
      AstraZeneca jumps after results 
    

        * 
      BoE cuts rate by 25 bps as expected
    

        * 
      Growth outlook for 2025 halved, inflation forecast raised
    

  
 (Updates after market close)
       Feb 6 (Reuters) - 
    Strong results from AstraZeneca helped London's blue-chip
index notch a record close on Thursday, while a dovish majority
behind the Bank of England's move to deliver a 25-basis-point
interest rate cut fuelled bets of more to come.
        The exporter heavy FTSE 100  .FTSE  also got a boost
from a weaker pound, closing 1.2% higher. The domestically
focussed mid-cap FTSE 250  .FTMC  gained 1%.
  
        The BoE 
    cut rates
     to 4.5% as expected but two policymakers sought a bigger
reduction.
  
        Traders are now expecting 63 basis points in rate
reductions by the end of the year from around 60 bps before the
meeting.    
    "The tone in the minutes signals a clear easing bias for all
MPC (Monetary Policy Committee) members and leaves the door open
for further interest rate cuts this year," said KPMG chief
economist Yael Selfin said.
        "Nonetheless, domestic uncertainty remains with the
upcoming tax rises and the increase in the National Living
Wage."
  
        Reaction in the pound and UK government bond market was
more sombre.
  
    Sterling slumped and UK gilt yields slipped as the BoE
halved its 2025 growth outlook - a blow for finance minister
Rachel Reeves who is seeking to speed up the economy.
        "The difference between the FTSE 100 and the UK economy
have been starkly laid bare today," said Chris Beauchamp, chief
market analyst at trading platform IG.
  
        "Any relief among individual Britons regarding lower
rates is likely to be tempered by the warnings about weaker
growth and higher inflation."
  
    AstraZeneca  AZN.L  shares jumped 6.6% to log their best day
in more than 4 years as the drugmaker's update on a likely fine
in China reassured investors the business impact would be
minimal, while it reported fourth-quarter earnings slightly
above analysts' estimates.
    Anglo American was also among the top FTSE 100 gainers.
        Most major subsectors were in the green pharma and
biotech index  .FTNMX201030  jumping 3.7% and industrial metal
miners  .FTNMX551020  rising 3%, helped by 5% gain in Anglo
American  AAL.L  after its fourth-quarter production report. 
  
    Highlighting the economic challenges, British construction
firm activity dropped in January with housebuilding contracting
at its fastest rate in a year.
    Elsewhere, a survey showed British households' expectations
for inflation fell in January, with one-year expectations
falling to 3.5% from 3.7%.

 (Reporting by Medha Singh and Lisa Pauline Mattackal in
Bengaluru; Editing by Vijay Kishore)
 ((LisaPauline.Mattackal@thomsonreuters.com;))
 
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