European Markets Decline Amid Trade Concerns and Novo Nordisk Slump

European equities experienced a downturn on Tuesday, primarily influenced by a significant drop in Novo Nordisk shares. Renewed criticism from US President Donald Trump targeting Federal Reserve Chairman Jerome Powell further intensified market anxieties already fueled by ongoing trade war uncertainties.

Shares of the Danish pharmaceutical company plummeted by 7.9% following the release of trial data concerning Eli Lilly’s experimental oral medication for weight management and blood sugar control. The data indicated that the competing drug demonstrated comparable efficacy to Novo Nordisk’s well-established drug, Ozempic.

The pan-European STOXX 600 index decreased by 0.6% as of 0822 GMT, while other key European indices showed mixed performance.

Investor caution regarding potential US tariffs remained heightened as markets reopened following the Easter holiday break.

The trading week commenced on a negative note after President Trump reiterated his disapproval of Powell, advocating for accelerated interest rate reductions by the central bank.

However, the decline in European shares has been relatively moderate compared to the movements observed in US markets.

Analyst Insights

According to Axel Rudolph, a senior technical analyst at IG Group, capital has migrated from US equity funds into Asian and European equity funds, resulting in greater resilience in the European market relative to the US. Nevertheless, he noted that European markets would still be susceptible to prevailing global negative sentiment, explaining the lower opening earlier in the day.

The outlook for corporate profits in Europe has become less optimistic due to ongoing uncertainty related to tariffs imposed by the US, with analysts anticipating a 3% decrease in first-quarter earnings, according to LSEG IBES projections from the prior week.

This forecast represents a more substantial contraction compared to the 2.2% decline anticipated by analysts earlier in the month.

Company Stock Movements
  • Shares of Biotage experienced a surge of 56.2% after the Swedish biotech enterprise announced that KKR had made a cash offer for the company, valuing it at approximately 11.6 billion Swedish crowns ($1.22 billion).
  • Swiss insurers Helvetia and Baloise saw their shares increase by 3.8% and 3.6%, respectively, following the announcement of their planned merger. The merger would create Switzerland’s second-largest insurance group, possessing a combined market share of about 20%.
Upcoming Economic Data

Market participants are keenly awaiting the euro zone consumer confidence report scheduled for release at 1400 GMT, followed by the release of flash PMI surveys from France, Germany, and the broader eurozone on Wednesday.