The Morning Bull - UK Market Morning Update Monday, 26 Oct 2026
UK markets are set for a cautiously upbeat open, with sentiment driven mainly by a clean upside surprise in domestic activity data. The latest UK PMIs point to an economy that is still generating forward momentum.
UK Manufacturing PMI came in at 52.8 for October 2026, while Services and the Composite PMI both printed at 53.1, an eight month high. That combination signals broad expansion and reinforces a constructive tone for UK assets at the open.
Stronger activity readings often nudge investors to reassess how long borrowing costs may stay restrictive, since a firmer economy can give central banks more room to prioritise inflation control. In that environment, companies with pricing power can be relatively better positioned, while highly leveraged businesses may continue to face pressure.
The key question is how long this growth pulse can coexist with softer consumer data and elevated global rate expectations. Upcoming CBI distributive trades data, along with US inflation and activity releases, could quickly test whether this PMI driven optimism has lasting support.
Stocks to Watch Before the Opening Bell
AstraZeneca (AZN)
Fresh oncology trial data puts AstraZeneca in focus. The SAFFRON Phase III study found TAGRISSO plus savolitinib cut the risk of disease progression or death by 45%, and the risk of death by 32%, versus platinum chemotherapy in MET-driven EGFR-mutated lung cancer. Investors will track regulatory submissions now underway in the US, Europe and other regions.
Separate Phase III results for sonesitatug vedotin in advanced gastric and gastroesophageal junction cancers showed a 42% reduction in risk of death, and 53% in later line patients, versus investigator's choice of therapy. The treatment also showed a manageable tolerability profile. Attention now turns to how regulators respond and how quickly this drug can move toward commercial use.
HUTCHMED (China) (HCM)
HUTCHMED moves into the spotlight through its role in the same lung cancer combination therapy. The SAFFRON Phase III trial reported that TAGRISSO plus savolitinib cut the risk of disease progression or death by 45% and extended median overall survival by nearly five months versus chemotherapy in MET-driven EGFR-mutated non small cell lung cancer.
A New Drug Application for the TAGRISSO and savolitinib pairing is already with the US FDA for certain locally advanced or metastatic NSCLC patients after EGFR TKI therapy. Readers should watch for regulatory feedback on that filing, as it could shape expectations for future demand for HUTCHMED's savolitinib franchise.
Top Movers
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Rockhopper Exploration (AIM:RKH)jumped 6.89%.
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Serica Energy (AIM:SQZ)gained 5.23%.
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BP (LSE:BP.)advanced 4.35%.
Top Losers
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Rolls-Royce Holdings (LSE:RR.)fell 7.57% after Safran flagged weaker wide body demand and technical signals pointed to further downside.
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Trainline (LSE:TRN)declined 6.56% after Canaccord cut its rating to Hold and lowered its price target.
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Fresnillo (LSE:FRES)fell 6.21% after quarterly figures showed lower year on year gold and silver production.
On The Radar
The next few sessions are all about how UK consumer demand and big bank and energy earnings stack up against stronger PMI readings and a heavy global central bank calendar.
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UK CBI Distributive Trades, Mon 26 Oct. The retail sales balance previously sat at -55, with a consensus of -47, and a weaker print than that could reinforce pressure on discretionary retailers and ease some of the support for sterling from firm PMIs.
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UK BoE Consumer Credit, Mortgage Approvals and Mortgage Lending, Thu 29 Oct. Consumer credit previously ran at £2.464b, approvals at 54,920 and lending at £4.41b, and softer September numbers would underline the drag from higher borrowing costs on housebuilders and domestic banks.
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Shell, Thu 29 Oct. Q3 2026 results will give a clean read on cash generation and capital spending across upstream and LNG operations. This matters for dividend capacity and for sentiment toward the wider FTSE 100 energy cohort.
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Lloyds Banking Group, Thu 29 Oct. Q3 2026 figures at 7:00 AM UTC put net interest margins and impairment charges in focus. This helps shape how investors assess UK credit quality and the earnings power of high street lenders.
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Bank of England sensitive US data and Fed decision, Wed 28 to Thu 29 Oct. The Fed rate call at 4.0% and US core PCE forecast at 0.3% for September will influence global rate expectations, which in turn feeds into UK gilt yields, bank funding costs and sterling moves.
Sector & Industry Watch
Energy: Oil pullback cools recent surge
Energy has extended its positive run over the past week, helped by firmer PMIs that point to steady industrial demand and fresh LNG activity linked to BP. Recent easing in oil prices has taken some heat out of the move, which matters for petrol costs and utility bills over time.
The key data point now is this week's US crude inventory reports, since big swings in global supply can quickly feed into UK listed oil and gas groups.
Real Estate: Rate pressure meets modest rebound
Real Estate has edged higher over seven days even though the broader UK market has slipped. Stronger UK PMI readings hint at healthier business activity, while high borrowing costs still weigh on property deals and mortgage activity.
The big domestic trigger is Thursday's Bank of England mortgage approvals and lending data, which will show how much higher rates are affecting housing demand and, by extension, listed property companies.
Materials: Weak week despite better factory pulse
Materials has dropped sharply over the past week and month, even as UK manufacturing PMI points to an expanding factory sector. That mix suggests investors are cautious on miners and commodity linked groups despite healthier order books at industrial customers.
For anyone exposed to this area, the most important check is Thursday's US durable goods orders, since large equipment demand can influence expectations for future metals and raw material use.
Consumer Discretionary: Retail squeeze meets early bounce
Consumer Discretionary has inched higher over seven days after a tougher year, while the latest UK retail sales numbers showed another drop in volumes. Households are still juggling higher inflation and mortgage costs, so extra spending on travel, cars and fashion remains sensitive to pay packets.
The catalyst to watch is today's CBI Distributive Trades survey, which will give a quick read on how high street retailers view demand into the crucial pre Christmas period.
Pharmaceuticals & Biotech: AstraZeneca trial wins lift mood
Pharmaceuticals & Biotech has moved higher over the past week, helped by strong trial results from AstraZeneca and HUTCHMED in lung and gastric cancers. These studies point to potential new treatment options, which can give the sector revenue streams that are less tied to UK consumer spending or domestic interest rates.
The next thing to monitor is progress on regulatory reviews for TAGRISSO plus savolitinib and sonesitatug vedotin, because decisions there can shape expectations for future earnings across this group.
How To Find Stocks That Fit Your Strategy
If the recent move in resilient sectors like Pharmaceuticals and Biotech is where your attention is, start with this list of 221 resilient stocks with low risk scores .
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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