European banking stocks lead market rally despite Novo Nordisk forecast cut
(MENAFN) On Wednesday, a robust rebound in banking Stocks propelled Europe's primary stock index to its most significant daily gain since November. This surge came despite a sharp decline in shares of Novo Nordisk, the continent's largest company by market value, following its announcement of a reduced full-year profit forecast. Key indices in Germany, France, Britain, and Spain each experienced increases ranging from 1.5 to 2 percent, reflecting a broad-based improvement in market sentiment.
Investor confidence continued to strengthen, as evidenced by a second consecutive day of decline in the "fear index," which had reached its highest level since March 2022 earlier in the week. The European Stoxx 600 index rose by 1.54 percent, closing at 495.96 points. The banking sector led the charge, with the banking index jumping 2.7 percent, marking its best intraday gain in over a year after suffering an 11 percent loss over the previous five days. This recovery indicates a renewed investor optimism towards the financial sector.
However, the positive market movement was not uniform across all sectors. Novo Nordisk shares plummeted by 6.7 percent, their largest one-day drop since August 2022, after the company issued disappointing earnings forecasts and reported weaker-than-expected sales of its weight-loss drug Wegovy. This development has sparked concerns about increasing competition from Eli Lilly, another major player in the pharmaceutical industry. In addition, German sportswear company Puma saw its shares fall by 10.8 percent after it also lowered its full-year profit forecast, further highlighting the mixed fortunes within the European market.
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