European shares log biggest daily drop after US tariffs hike
Investors shunned riskier equities globally as Trump continued his tariff blitz, announcing steep levies on exports from dozens of trading partners including Canada, Brazil, India and Taiwan with countries not listed subject to a base 10% rate ahead of a Friday trade deal deadline.
Healthcare stocks lost 1% after US President Donald Trump sent letters to the leaders of 17 major pharmaceutical companies, including Novo Nordisk and Sanofi, outlining how they should slash US prescription drug prices.
The sector was already singed this week by Novo Nordisk's profit warning. The Denmark-listed Wegovy-maker shed 1.8% and logged its steepest weekly decline on record.
'We saw during the week that companies like Novo Nordisk had different issues. European pharma is very close to bottoming and that's why it didn't react to the uncertainty around tariffs and policy,' Anthi Tsouvali, a multi-asset strategist at UBS Global Wealth Management said.
'Europe is an export market... if we see heightened tariffs all over the world and trade being subdued, then that will have an impact on European companies regardless.'
The pan-European STOXX 600 index slid 1.9% and marked its biggest one-week drop since early April when Trump unveiled his tariffs on world economies. The euro STOXX volatility index jumped 4.25 points to its highest in over one-month.
The STOXX index has lost over 5% from its March peak, after coming within 2% of that level earlier this week, dragged down by a record plunge in Novo Nordisk shares, and as investors assess the implications of the US-EU trade deal.
Markets in Switzerland were shut for a holiday, but UK-listed Watches of Switzerland declined 6.8%, while a US-listed exchange traded fund tracking the country's equities slid to a more than three-month low and was last down 1.2%.
Most regional bourses were in the red, with Germany's blue-chip DAX down 2.7%, while Denmark's OMXC fell 1.8% to a nearly two-year low. Banks, that had rallied earlier in the week, were down 3.4% and were the top sectoral underperformer as they notched their biggest one-day drop since early April.
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