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FTSE 100 up 0.6%, FTSE 250 rises 0.7%

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Diploma shares rise after RBC rating upgrade

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JD Wetherspoon falls after flagging higher costs

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UK business activity grows at slowest pace in 5 months-

PMI

Oct 3 (Reuters) - London's FTSE 100 scaled a fresh

intraday record peak on Friday, led by gains in financials and

miners, as growing expectations for a Federal Reserve interest

rate cut buoyed sentiment across global markets.

The blue-chip index was up 0.6% as of 0936 GMT. It

is on track for a 2% weekly rise, its biggest jump since April.

The mid-cap index rose 0.7%, heading towards a 2.4%

weekly gain.

Financial stocks emerged as the standout performers across

both indexes, with the banking sector climbing

1.4% and investment banking shares surging 1.3%.

Precious metal miners Fresnillo and Endeavour

Mining ( EDVMF ) were among the FTSE 100's top performers, gaining

over 2% each due to rising gold prices.

While, the benchmark hit an intraday peak on Thursday, it

ultimately surrendered gains to finish in negative territory.

The blue-chip index's relative lack of technology exposure

meant the market could not fully capitalize on the tech-driven

rally that propelled U.S. stocks to fresh highs in the previous

session.

Meanwhile, with the U.S. government shutdown continuing, the

highly anticipated jobs report, originally scheduled for Friday,

is now unlikely to be released.

Traders are now pricing in an almost certain Fed rate cut

later this month, following disappointing private payrolls data

earlier this week.

Back home, a survey showed British business activity grew at

the slowest pace in five months in September as companies and

consumers put big spending decisions on hold, waiting to see if

they would be hit by higher taxes in November's budget.

Economists believe that Finance Minister Rachel Reeves will

need to implement tax hikes or reduce spending in the upcoming

annual budget.

Among individual stocks, pub group J D Wetherspoon ( JDWPF )

fell 4.7%, placing it at the bottom of the mid-cap index after

flagging higher costs due to potential tax increases and

national insurance contributions.

Technical products and services distributor Diploma

gained 2.6% after brokerage firm RBC raised its rating to

"outperform" from "underperform".