European equities gave back earlier gains on Friday, dragged down by disappointing results from a trial drug for Novo Nordisk and weak earnings from Universal Music Group. The Stoxx Europe 600 index closed nearly flat in London, with Novo Nordisk and Universal Music being the two largest drags on the benchmark index. The index had risen as much as 1% during the session, hitting a new all-time high, but those gains were fully erased as Wall Street's cash market opened and the yield on the 10-year US Treasury note climbed to its intraday high, before the index ultimately settled unchanged.
The index still managed to post a fourth consecutive monthly gain. Neil Birrell, Chief Investment Officer at Premier Miton, noted, "It's not surprising to see end-of-month profit-taking and risk reduction from investors. Tariff issues are back in the spotlight, oil prices remain firm, central banks are growing more cautious, and long-term bond yields are rising rapidly."
Novo Nordisk shares tumbled 7.4% after one of its experimental drugs failed to reduce the risk of heart attacks and strokes in a large study, denting the company's growth prospects beyond its core obesity and diabetes treatments. Meanwhile, Universal Music Group saw its stock price collapse by 25%, hitting its lowest level since listing, as growth in its subscription revenue fell short of expectations.
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