London’s benchmark FTSE 100 index achieved a new historic high on Wednesday, October 1, 2025, closing at an impressive 9446 points, marking a significant milestone for the UK stock market. This surge was predominantly fueled by robust performance in the healthcare sector, with pharmaceutical giants leading the charge and AstraZeneca once again becoming London’s largest listed company by market capitalization. The positive market sentiment was further bolstered by relief over a newly struck agreement between US pharmaceutical leader Pfizer and the Trump administration, which aimed to address drug pricing and avert potentially damaging tariffs.
A New Zenith for the FTSE 100
The FTSE 100 index concluded the trading day up 1.03%, surpassing its previous record close and demonstrating remarkable resilience against broader global economic uncertainties, including the ongoing US government shutdown. The index had already achieved a new intraday record of 9,423.24 points during the session, extending its strong performance from the third quarter, which saw a 6.7% gain, its best quarterly performance since late 2022. Year-to-date, the FTSE 100 has advanced approximately 15%, underscoring a strong year for UK equities. This positive momentum contrasts with the more subdued sentiment observed in some other global markets. The strength of the British pound also provided additional support to UK equities, making them more attractive to international investors.
AstraZeneca’s Ascendancy
AstraZeneca was a primary driver of the FTSE 100’s record-breaking ascent, with its shares soaring by a remarkable 11.2% on the day. This significant jump saw the pharmaceutical powerhouse reclaim its title as London’s most valuable listed company, overtaking banking titan HSBC. The company’s market capitalization has now exceeded £192 billion, reflecting a substantial shift in investor confidence towards defensive, healthcare-focused businesses. This resurgence marks a significant change, particularly after recent discussions about AstraZeneca potentially elevating its New York listing.
US Drug Deal Eases Tariff Fears
The broader rally across the pharmaceutical sector was significantly influenced by a development concerning US drug pricing and tariffs. The Trump administration announced a landmark agreement with Pfizer, granting the company a three-year reprieve from planned tariffs in exchange for voluntarily lowering prescription drug prices for US consumers. Under the deal, Pfizer committed to offering ‘most-favored-nation’ pricing for Medicaid, aligning US prices with those in other developed countries, and will participate in the new ‘TrumpRx’ direct-to-consumer platform. This news eased investor concerns about potentially severe tariffs on branded drugs, which had been a source of market anxiety. The agreement is seen by some as a breakthrough in addressing drug affordability, though specifics on the extent of patient benefits remain a subject of analysis.
Broader Market Impact and Other Key Movers
Following AstraZeneca’s lead, other major pharmaceutical stocks also experienced considerable gains. GSK saw its shares climb by 6.1%, and Hikma Pharmaceuticals recorded a rise of 5.7%. This widespread strength in the healthcare sector mirrored positive movements in European markets, with companies like Roche, Novo Nordisk, and Sanofi also posting gains.
While the FTSE 100 reached new highs, the mid-cap FTSE 250 index showed a more mixed performance, eventually closing 0.2% higher after earlier declines. Among notable movers on the FTSE 250, Greggs PLC saw its shares jump significantly after reporting a 6.1% rise in third-quarter total sales, indicating resilient consumer spending on affordable food options. Conversely, Tate & Lyle faced headwinds, with its shares tumbling significantly after warning of lower annual profits due to a demand slowdown.
Market Context and Future Outlook
The FTSE 100’s record-breaking performance occurred against a backdrop of global economic concerns, most notably the ongoing US government shutdown, which threatened to delay key economic data releases. Despite this uncertainty, the UK market demonstrated a strong recovery and a positive outlook, particularly within its leading pharmaceutical companies. This event highlights the increasing importance of the healthcare sector as a popular and resilient segment of the London stock market. While the immediate relief from tariff threats and the positive performance of major companies have propelled the index to new heights, market participants will continue to monitor global trade dynamics, US policy developments, and the broader economic environment for sustained growth. The strong showing of AstraZeneca as London’s most valuable stock underscores the enduring appeal of established, globally significant companies within the UK’s financial landscape.
