Fri Sep 20 07:37:06 UTC 2024: ## European Shares Slip Despite Fed Rate Cut, Novo Nordisk Slumps on Disappointing Data
**Frankfurt/London, October 6, 2023** – European shares experienced a downturn on Friday, following a strong rally the previous day fueled by the US Federal Reserve’s substantial interest rate reduction. The pan-European STOXX 600 index closed down 1.4%, despite marking its second consecutive week of gains.
The decline was attributed to disappointing news from the pharmaceutical sector, specifically Novo Nordisk. Shares of the Danish drugmaker plummeted 5.4% after a Phase 2a trial of its experimental obesity drug, monlunabant, yielded results below market expectations. This dragged the broader healthcare sub-sector down 1.9%.
The automotive sector also faced significant losses, with Mercedes-Benz leading the decline by 6.8%. The company cut its full-year profit margin target for the second time in less than two months, impacting other industry rivals like Volkswagen and Forvia, which fell by 3.4% and 8%, respectively.
Tech stocks were also negatively affected, with a 2.7% drop driven by ASML, a Dutch computer chip equipment maker, which saw its shares fall 4.2% after Morgan Stanley downgraded its rating.
Despite the negative sentiment, market optimism remains high due to the anticipated series of interest rate cuts from the Fed. Richard Hunter, head of markets at interactive investor, stated that the market expects further significant reductions before year-end, setting the stage for a positive end to the year.
Positive economic data from the UK and Eurozone, including stronger-than-expected retail sales in the UK and rising consumer confidence in the Eurozone, offered some support to the market. However, the downturn in major European stock markets suggests that investor confidence may be waning despite the Fed’s actions.
First Piper 