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Investing.com -- British stocks traded higher on Monday, starting the week on a positive note after the U.S. and China agreed to temporarily reduce tariffs, sparking a global rally across sectors, although U.K. pharma stocks faced a setback due to Donald Trump’s move to cut drug prices.
The blue-chip index FTSE 100 gained 0.6%, while the British pound fell about 0.8% against the dollar to 1.3202. Meanwhile, DAX index in Germany rose 0.3%, the CAC 40 in France gained 1.4%.
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U.S., China agree on temporary tariff pause
The U.S. and China have agreed to implement a 90-day halt on escalating tariffs and will temporarily reduce existing trade duties.
As part of the deal, Washington will scale back tariffs imposed by former President Donald Trump on Chinese goods to 10%, although a separate 20% levy tied to China’s alleged involvement in fentanyl trafficking will stay in place.
In turn, Beijing will also lower its tariffs on American products to 10%, the two governments said in a rare joint statement after intensive weekend negotiations.
Trump’s drug price cut hits pharma shares
Despite the global rally, the pharmaceutical sector faced a major setback after Trump announced on Sunday that he would sign an order on Monday to lower prescription drug and pharmaceutical prices.
On Monday morning, he promised a 59% price cut in a post on Truth Social.
Global pharma stocks plunged, with U.K. companies AstraZeneca PLC (ST:AZN) and GSK plc (LON:GSK) down 3.3% and 1.8%, respectively.
BoE’s Lombardelli: U.S. trade policies could weaken U.K. growth
Clare Lombardelli, the Bank of England’s deputy governor, suggested on Monday that U.S. trade policies are expected to contribute to slower growth and sustained low inflation in the U.K.
Speaking at the Bank of England Watchers’ Conference in London, Lombardelli explained that higher tariffs and uncertain U.S. policies could lead to weaker growth and inflation, primarily due to reduced demand and trade diversion as other countries scale back their exports to the U.S.
Qualcomm’s deadline to bid for Alphawave extended
Alphawave IP Group (LON:IPO) PLC (LON:AWE) said on Monday that the U.K. Takeover Panel has extended the deadline for Qualcomm Incorporated (NASDAQ:QCOM) to make a formal buyout offer, now setting it for May 27.
The deadline was previously pushed to May 12 from an original April 29 cutoff, following a mutual agreement between the companies to allow more time for ongoing negotiations, in line with U.K. takeover regulations.
Cobalt Holdings to launch London IPO; Glencore (OTC:GLNCY) takes 10% stake
Cobalt Holdings announced its plans to launch an initial public offering (IPO) in London this June, targeting around $230 million in proceeds.