Lunchtime market roundup: Stock prices climb, boosted by pharma

Stock prices in London were higher on Tuesday midday, boosted by pharmaceutical stocks, while investors closely monitored the situation between the US and Iran.

The FTSE 100 index was up 35.78 points, 0.3%, at 10,720.66. The FTSE 250 was up 100.31 points, 0.4%, at 24,435.63, and the AIM all-share was up 2.98 points, 0.4%, at 786.34.

The Cboe UK 100 was up 0.2% at 1,065.48, the Cboe UK 250 was up 0.4% at 21,292.04, and the Cboe small companies was up 0.1% at 19,021.66.

In European equities on Tuesday, the CAC 40 in Paris was up 0.1%, while the DAX 40 in Frankfurt was up 0.5%.

UK mortgage borrowing increased in August, despite a further decline in mortgage approvals, while consumer credit borrowing accelerated, according to figures from the Bank of England.

Net borrowing of mortgage debt by individuals rose to £4.4 billion in August from £4.1 billion in July, but remained below the previous six-month average of £5.2 billion.

However, net mortgage approvals for house purchases, an indicator of future borrowing, fell to 54,900 from 55,900 in July, their lowest level since the end of 2023 and below the previous six-month average of around 60,100.

Approvals for remortgaging with a different lender declined to 34,000 from 34,600.

Gross mortgage lending fell to £23.6 billion from £25.3 billion in July, while repayments decreased to £20.4 billion from £21.1 billion.

Meanwhile, the effective interest rate on newly drawn mortgages rose to 4.60% from 4.45%, while the rate on the outstanding mortgage stock edged up to 4.00% from 3.97%.

Consumer borrowing picked up during the month, with net consumer credit borrowing rising to £2.5 billion from £2.1 billion in July, above the previous six-month average of £1.9 billion.

Credit card borrowing increased to £1.2 billion from £900 million, while other forms of consumer credit, including car finance and personal loans, rose to £1.3 billion from £1.2 billion.

The annual growth rate of consumer credit accelerated to 9.6% from 9.3%. Credit card borrowing grew 13.3% annually, accelerating from 12.6%, while growth in other forms of consumer credit edged up to 7.9% from 7.7%.

The pound was quoted at USD1.3237 at midday Tuesday, lower than USD1.3256 at the London equities close on Monday. Against the euro, sterling rose to EUR1.1666 from EUR1.1658 a day prior.

The euro stood at USD1.1347, lower than USD1.1370 late Monday. Against the yen, the dollar was quoted at JPY157.28, slightly lower than JPY157.31.

Brent oil was quoted at USD106.00 a barrel at midday in London on Tuesday, lower than USD107.60 late Monday.

Oil prices eased as mediators sought to bring the US and Iran back to the negotiating table.

US President Donald Trump is willing to consider sanctions relief and the release of frozen Iranian funds as part of a final agreement, but only if Tehran makes "concrete progress" on its nuclear programme, a US official told CNN on Monday.

The official described discussions through mediators as "positive and constructive", but said there would be no agreement without progress on nuclear issues.

Trump on Saturday rejected Iran's latest proposal to reopen the Strait of Hormuz, calling it "unacceptable", but told Axios on Sunday that he expected further talks with Iran this week.

Back in London, pharmaceutical stocks were among the strongest FTSE 100 performers, with GSK up 2.0%. Halma rose 2.3%.

At the bottom of the blue-chip index, Ithaca Energy fell 2.8%, tracking oil prices lower.

British American Tobacco lost 2.1% after flagging foreign exchange headwinds for 2026.

The cigarette and vaping products maker expects currency effects to reduce full-year adjusted diluted earnings per share growth by between 2.0% and 2.5% at current spot rates.

BAT expects revenue and adjusted profit from operations growth at the lower end of its respective 3% to 5% and 4% to 6% guidance ranges, while adjusted diluted EPS growth is expected around the midpoint of its 5% to 8% range at constant exchange rates.

Ahead of its capital markets day in the US, BAT targeted mid-teens New Category revenue growth through 2030 and a New Category contribution margin of at least 30% by then. It also expects to end 2026 within its 2.0 to 2.5 times target leverage range.

On the FTSE 250, Vesuvius jumped 22% as it continued to evaluate the latest takeover proposal from RHI Magnesita, whose shares were down 3.0%.

Close Brothers Group surged 12% after reporting that cost savings had exceeded expectations.

Zigup gained 4.4% after hailing a "strong" performance in Spain and at FMG.

Oxford Nanopore Technologies rose 3.9%, while Trustpilot Group gained 3.6% after Citigroup initiated coverage with a 'buy' rating and a 375p price target.

Stocks in New York were called mixed. The Dow Jones Industrial Average was called down 0.1%, the S&P 500 marginally lower and the Nasdaq Composite marginally higher.

The yield on the US 10-year Treasury was quoted at 5.23%, narrowing from 5.26%. The yield on the US 30-year Treasury was quoted at 5.55%, narrowing from 5.57%.

Gold was quoted at USD4,140.11 an ounce at midday Tuesday, down from USD4,282.86 on Monday.

Still to come on Tuesday's economic calendar, Canada releases gross domestic product figures, while the US reports house price data and Jolts job openings.

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