European stocks close up; Novo Nordisk logs its biggest daily drop on record
The Wegovy producer (NOVOb.CO), opens new tab, once a market darling, logged its biggest one-day drop on record of 23%, wiping about $57.5 billion off its market value, as it slashed its outlook for 2025 sales growth and named a new CEO as it battles rising competition in the obesity drug market.
The stock weighed on Denmark's Copenhagen OMX index (.OMXC20), opens new tab, which lost 11.9%, while the broader STOXX pharmaceutical sector (.SXDP), opens new tab slid 1.6%.
"It's doubly disappointing for investors when you find a company that had been anticipated to be a real star in a booming sector, and they don't seem to be able to capitalize on what was a really good competitive position," said Danni Hewson, head of financial analysis at AJ Bell.
The stock "seems to be getting pummeled" by its U.S. rival, Eli Lilly, Hewson said. "Now we are seeing a change in CEO, but investors are not going to give the new guy an awful lot of time to get the house in order."
Eli Lilly (LLY.N), opens new tab also lost 5% in afternoon trading.
More broadly the pan-European STOXX 600 index (.STOXX), opens new tab finished 0.3% higher, with banks (.SX7P), opens new tab gaining 1.7% to hit their highest since September 2008 as investors bet on improved profits and resilience in a sector broadly insulated from tariff turmoil.
In a relief for investors, the U.S. and EU signed an agreement to lower U.S. tariffs to 15%, ending weeks of negotiations earlier this week and offering investors some clarity on the trade front.
Analysts said the corporate earnings landscape has markedly improved following the deal, and they now project European companies to deliver 1.8% growth in second-quarter earnings compared to a 0.3% decline just a week earlier, according to LSEG I/B/E/S data.
Aerospace and defence stocks (.SXPARO), opens new tab added 2.2% after three straight days of losses. The new framework trade deal offered zero-for-zero tariffs on aircraft and parts. Airbus and Safran SA gained 1.7% and 2.1%, respectively.
Franco-Italian eyewear group EssilorLuxottica (ESLX.PA), opens new tab shares jumped 6.9% after the company reported an increase in first-half operating profit despite a tariff hit.
Dutch company Philips (PHG.AS), opens new tab rose 9.2% to the top of the index after the healthcare technology group lowered its tariff impact estimates following the U.S.-EU trade deal.
Attention now turns to Wednesday's second-quarter GDP releases from both the euro zone and the U.S., followed by the Federal Reserve's highly anticipated rate decision and Friday's U.S. employment report.
($1 = 0.8663 euros)
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