Europe midday: Stoxx 600 nears all-time high on pharma gains
By Benjamin Chiou
Date: Wednesday 01 Oct 2025
(Sharecast News) - A lack of negative surprises from economic data lifted European stocks on Wednesday, sending the Stoxx 600 benchmark to within a whisker of its all-time high, helped by strong gains in the pharma sector.
By lunchtime in central Europe, the regional benchmark index was up 0.7% at 561.79 - a level it has not closed above since early March when it settled at a record 563.13.
Indices in London and Zurich were standout performers, up 0.7% and 1.5% respectively, with heavyweight drugmakers providing a lift following an announcement the previous session by Donald Trump.
In economic data, eurozone inflation rose as expected in September, moving above the European Central Bank's 2.0% target for the first time in five months. The harmonised consumer price index (CPI) for the single-currency region was 2.2% higher than last September, according to Eurostat on Wednesday, up from 2.0% in August - a level where it had stayed for three months.
The figures follow comments from ECB chief Christine Lagarde on Tuesday who said that inflation risks were "contained". In a speech in Finland, Lagarde said that price pressures are unlikely to move much from the 2% target despite ongoing trade uncertainties.
The second reading of September's S&P Global/HCOB eurozone manufacturing PMI was revised to 49.8, up from the flash estimate of 49.5 released last week but still below the 50-point mark which separates growth from decline. This was down from 50.7 in August, which marked the first increase in manufacturing activity in more than three years.
S&P Global also reported that the UK manufacturing PMI for September was in line with its initial estimate at 46.2, down from 47.0 in August, marking the sharpest contraction in five months. This was the 12th straight month of contraction for the sector.
Meanwhile, Swiss retail sales fell at a year-on-year rate of 0.2% in August following 0.9% growth the previous month, according to the Swiss Federal Statistical Office, marking its biggest annual drop in 14 months.
Market movers
Pharmaceutical stocks were rising strongly across the continent following the announcement that the Trump administration was implementing so-called 'Most Favoured Nation' drug pricing plans, with drugmakers encouraged to drop US prices in exchange for more lenient tariffs on imports.
American firm Pfizer struck an agreement for a three-year grace period from sector-specific tariffs, after committing to additional investments in US manufacturing and R&D, raising hopes of similar deals for European outfits like Merck, AstraZeneca, Roche and Novartis, whose stocks were all on the rise on Wednesday.
"Overall, we see Pfizer's agreement on MFN as a potential bellwether for the sector which, we anticipate is likely to be replicated by EU Pharma companies and should therefore result in a broadly manageable impact from MFN on EU Pharma, reassuring investors," JPMorgan analysts said in a research note.
Sportswear and apparel groups Puma and Adidas rose after sector leader Nike posted a surprise increase in quarterly sales on Tuesday evening - though the American brand did warn about continued weakness in China.
In London, Tate & Lyle was a heavy faller, dropping 10% after warning about a slowdown in market demand. For the full year, Tate & Lyle now expects both revenue and EBITDA to decline by a "low single-digit percent" compared to pro forma comparatives.
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