European shares close at fresh record high as Novo Nordisk drives healthcare boost
European shares closed at a new peak on Tuesday, powered by gains in the healthcare sector, after heavyweight Novo Nordisk clinched U.S. approval of its weight-loss pill.
The pan-European STOXX 600 added 0.4% at 588.81. Major regional markets were mostly higher, with the benchmark index in London up 0.3% while the one in France dipped 0.2%.
Shares of Novo Nordisk advanced 9.2%, posting their biggest one-day gain since August 2023, after the U.S. Food and Drug Administration approved its weight-loss pill, giving the Danish drugmaker an edge in the race to market oral weight-management medications and regaining momentum against its U.S. rival Eli Lilly.
The Wegovy manufacturer, once an investor darling, saw billions erased from its market value earlier this year as concerns mounted about losing ground in the obesity drug market it pioneered.
The healthcare sector jumped 1.4%, outperforming peers.
"The competition driving both these companies to deliver for the consumer is fantastic and it will be a lift for Novo Nordisk, because it really has struggled over the past year ... it needed to deliver for investors," said Danni Hewson, head of financial analysis at AJ Bell.
A gauge for euro zone equity volatility fell 0.36 point to 14.04, its lowest in over a year.
Basic resources shares added 1% after silver climbed above the $70 per ounce mark for the first time. Utilities gained 0.8%.
"The upside in metals remains strong but the overbought conditions are building as the setup becomes highly speculative, specifically in silver," said Daniela Hathorn, senior market analyst at Capital.com.
"The thin liquidity over the holiday period could see volatility ramp up, potentially magnifying a pullback if it were to materialise."
On the flip side, automobiles dipped with Valeo and Renault down around 1.5% each.
The STOXX 600 index is on track for its strongest annual performance since 2021, aided by declining interest rates, Germany’s fiscal expenditure commitment and diversification of portfolios away from lofty U.S. tech stock valuations.
On Monday, China said it will impose provisional duties of up to 42.7% on dairy imports from the European Union, seen as retaliation for the bloc’s tariffs on electric vehicles.
Across the Atlantic, the U.S. economy grew faster than expected in the third quarter, driven by consumer spending, in an otherwise data-light week.
Source : Reuters.com
