European shares close at record high levels
The pan-European STOXX 600 gained 0.4% at 588.81
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 gained 0.4% at 588.81. Major stock markets were mostly higher, with the benchmark index in London 0.3% higher, while the one in France slipped 0.2%.
Shares of Novo Nordisk gained 9.2%, posting their biggest one-day rise 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 favourite, 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 climbed 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 dropped 0.36 point to 14.04, its lowest in over a year.
Basic resources shares rose 1% after silver jumped above the $70 per ounce mark for the first time. Utilities advanced 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, Hathorn said.
On the flip side, automobiles slipped with Valeo and Renault down nearly 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.