European markets closed lower on Friday, marking the second consecutive week of losses, as healthcare stocks dragged the STOXX 600 index to its worst performance since early September. The pan-European index dropped 0.9% on the day, after hitting an intraday low of 2%, and recorded a 1.9% loss for the week.
The sharp decline was primarily driven by Novo Nordisk, whose shares plunged by 20.8% following disappointing results in a late-stage clinical trial for its experimental obesity drug CagriSema. The setback wiped out $125 billion from the company’s market value, pulling down the healthcare sub-sector by 4%.
Denmark’s OMXC20 index also tumbled, closing down by 13.2%, its lowest level since August 2023. Meanwhile, Idorsia, a Swiss biopharmaceutical firm, saw its shares collapse by 50.4% after announcing stalled talks over the global rights to its hypertension drug Tryvio.
Other pharmaceutical firms also suffered, with Zealand Pharma losing 3.8% after the U.S. FDA rejected its bowel disease drug application.
Market sentiment was further weighed down by comments from U.S. President-elect Donald Trump, who threatened tariffs on the EU if it did not increase purchases of U.S. oil and gas to address what he called a trade imbalance.
The European Commission responded, stating it was prepared to discuss strengthening ties with the U.S., particularly in the energy sector. However, concerns over a potential trade war unsettled investors already grappling with slowing growth in Europe.
In the UK, the FTSE 100 index recorded a 0.3% decline, buoyed slightly by better-than-expected retail sales data in November, which rose 0.2%. However, the figures fell short of forecasts, adding to worries about slow economic momentum.
Despite recent losses, the STOXX 600 remains up nearly 6% for the year, though it trails the 25% surge seen in the U.S. S&P 500 index.
Real estate stocks provided a rare bright spot, gaining 1.4% amid hopes of lower borrowing costs in the medium term.
Investors are now bracing for further volatility heading into 2025, as interest rate expectations, geopolitical risks, and sector-specific challenges continue to weigh on sentiment.
