FRANKFURT: European shares closed flat on Wednesday, surrendering early session gains, as healthcare stocks felt the pinch from US President Donald Trump’s latest threat to impose higher tariffs on pharmaceutical imports. The pan-European STOXX 600 index closed 0.06% lower, breaking its two-day winning streak despite starting the session on a positive note.
Healthcare stocks bore the brunt of the selling pressure. The sector index plunged 2.8% to its lowest level in more than three months after Trump unveiled a graduated tariff plan targeting pharmaceutical imports that could see levies on the sector jump up to 250% within 18 months.
“This is where it’s important to be specific about tariffs because certain stocks and sectors will be impacted differently across regions,” said Steve Sosnick, chief market analyst at Interactive Brokers. “In Europe and Asia, investors are considering tariff impacts more carefully since exporters bear much of the brunt directly.”
The sector was also singed as Novo Nordisk warned it expects continued competition from copycat versions of its Wegovy obesity drug this year, a message that sent shares of the Danish drug maker down 5.4%. Novo cut its full-year sales and profit forecasts last week, wiping $95 billion off its market value since then. Meanwhile, Swiss President Karin Keller-Sutter met with US Secretary of State Marco Rubio to discuss potential trade solutions after Trump announced a 39% tariff on Swiss goods.
The talks focused on increasing Swiss purchases of US energy and defence products to avert the steep tariff, which threatens significant damage to Switzerland’s export-driven economy. Switzerland’s benchmark SMI index fell 0.9%, weighed down by drugmakers Novartis and Roche which lost 3.3% and 2.6%, respectively. Bayer shares tumbled 9.9% on investor concerns that the German pharmaceutical firm’s earnings were inflated by soccer player transfer fees rather than supported by its core healthcare and agriculture businesses.
On the data front, Euro zone retail sales grew quicker than thought in June, reinforcing views that the 27-nation bloc remains resilient to trade uncertainty. Among others, Beiersdorf fell 8.4% and was among top decliners after the German consumer goods maker cut its annual organic sales growth outlook. On the flip side, Siemens Energy rose 1% after the company said it expects to hit the upper end of its 2025 growth outlook estimates.
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