PARIS: European stocks edged higher on Wednesday as Novo Nordisk shares jumped on a positive update on its diabetes drug Ozempic, though a drop in shares of Fresenius Medical and French luxury giant LVMH capped gains.
The pan-European STOXX 600 index rose 0.2% to hit a near three-week high. Most regional markets were mixed, with France’s blue-chip index lagging the most, down 0.4%.
LVMH dropped 6.5% to touch a 10-month low after the luxury goods bellwether reported a 9% rise in third-quarter revenue, marking slower growth as a strong wave of post-pandemic spending eases.
Shares of other French luxury majors Hermes and Kering fell about 1.5% each, while a gauge of top 10 European luxury stocks tumbled 2.7% to its lowest level in a week.
“China has been the engine of growth for the luxury goods market and obviously the fact that the Chinese economy has been struggling and consumers are all cautious hasn’t helped LVMH,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
The STOXX 600 rallied almost 2% on Tuesday in its biggest one-day gain this year, boosted by a retreat in US Treasury yields following dovish comments from Federal Reserve policymakers.
Focus this week will be on US inflation data and speeches from Fed officials for clues on the interest rate trajectory, while markets will also await the European Central Bank’s (ECB) minutes for its September policy meeting on Thursday.
The ECB has made significant progress in getting inflation back down to target, but new shocks could still require the bank to continue a now-paused tightening cycle, two influential policymakers said on Wednesday.
Investors also remained cautious as the ongoing conflict in the Middle East raised the prospect of further spike in oil prices.
Israel formed an emergency unity government on Wednesday as it pounded Gaza to root out Hamas and deployed forces north of the densely populated Palestinian enclave.
Helping keep the markets afloat, Novo Nordisk jumped 4.9% after the Danish drugmaker said it would stop a trial studying Ozempic to treat kidney failure in diabetes patients ahead of schedule because it was clear from an interim analysis that the treatment would succeed.
Shares of German kidney dialysis provider Fresenius Medical Care sank 17.5%, to the bottom of the STOXX 600 on the news.
Britain’s Travis Perkins slumped 6.2% after the building material supplier cut its full-year profit forecast.
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