GSK takeover of Nuvalent drags FTSE 100 as inflation worries

London’s FTSE 100 fell 0.3% to 10,341 as GSK shares dropped 2.8% after the drugmaker announced a $10.6 billion offer for US cancer specialist Nuvalent. The mid-cap FTSE 250 rose 0.2%, leaving the broader UK market with a mixed performance.

By 0810 GMT GSK’s decline made it one of the biggest individual drags on the blue-chip index. The FTSE 350 Pharmaceuticals and Biotechnology index fell 1.6%, the worst-performing sector on the day. GSK described the proposed purchase as a step to strengthen its lung cancer portfolio; investors flagged concerns about the deal’s size and strategic implications.

Global developments also affected trading. Markets noted a halt in exchanges of attacks between Iran and Israel after an appeal from US President Donald Trump, who indicated he might have an idea for a deal with Iran within days. Despite that apparent de-escalation, higher energy costs linked to the conflict supported expectations that the Bank of England could raise interest rates by 25 basis points in September, according to LSEG data.

The UK’s main indexes underperformed peers in Asia and the United States, in part because the domestic market has limited exposure to artificial intelligence-related companies. The government announced a £1.1 billion programme to expand domestic AI computing capacity.

Individual stock moves were mixed. BP fell about 1% as crude oil prices weakened and investor scrutiny continued after the departure of former chairman Albert Manifold. Venture capital firm Molten Ventures rose 9.5% after reporting annual results. Fever-Tree Drinks gained 6.4% after it signalled it expects to meet full-year revenue and core profit targets and increased its share buyback programme. Homebuilder MJ Gleeson declined 3.5%. The pound recovered above $1.3350 after earlier touching a three-week low.

Data highlighted rising cost pressures in construction. A survey from S&P Global showed input cost inflation for British construction firms climbed to 70.5 in March from 59.5 in February, the highest month-on-month reading since records began in 1997. New orders for construction fell at the fastest pace since November last year and S&P Global’s headline construction Purchasing Managers’ Index remained below the 50.0 threshold separating expansion from contraction for the fifteenth consecutive month, but ticked up to 45.6 in March from 44.5 in February. A separate report showed manufacturers faced their steepest monthly rise in cost burdens since October 1992.

Official government figures showed construction output rose 0.2% in January, following a 2% contraction in the fourth quarter of 2025. The reports provide a mixed picture for the sector, with output edging up while cost and demand measures point to continued pressure.