FTSE Open: UK shares rally on rate cut hopes, AstraZeneca buys China biotech

London equities rallied at the open on Wednesday as diminishing inflationary pressures rekindled investor appetite for risk assets, with optimism growing that an easing price backdrop could allow central banks to relax their aggressive monetary tightening campaigns next year.

The FTSE 100 climbed 0.7% in early trading while the more domestically-focused FTSE 250 also climbed around 0.3%.

Weighing on sentiment was the latest US inflation report showing consumer prices rose at a slower pace in November, landing slightly below economist forecasts. The data amplified building hopes that the Federal Reserve could temper interest rate hikes next year once inflation shows more convincing signs of subsiding back toward target levels.

Among heavyweight gainers, AstraZeneca rose 1.6% after unveiling plans to acquire China’s Gracell Biotechnologies, a clinical-stage biotech developing cell therapies, in a $1.2 billion deal.

Mining stocks were also on the ascent, with Anglo American up 3.4%, Endeavour rising 1.9% and Glencore advancing 2.0%. Industrials likewise climbed, led by a 1.6% gain for chemicals producer Croda International, a 2.0% advance for equipment rental firm Ashtead and a 1.5% rise for Spirax-Sarco Engineering.

On AIM, Canadian Overseas Petroleum powered 24% higher after its chief executive officer John Cowan resigned, though he will temporarily remain on the board. The oil and gas explorer’s stock has faced challenges in recent weeks, plunging 70% in the lead-up to Christmas on project delays and financing concerns. Despite today’s bounce, COPL’s equity is still down 60% over the past week and 98% in the last year.

Also on AIM, stockbroker WH Ireland climbed nearly 10% after saying it returned to profitability in November despite recent “challenging” market conditions weighing on first-half revenues.