European shares fell on Wednesday, weighed by losses in healthcare stocks, while investors were on edge ahead of reciprocal tariffs from the United States that are feared to herald an era of slow global growth and higher inflation.
The pan-European STOXX 600 index was down 0.7% at 0754 GMT, with Germany’s trade-sensitive DAX falling 1.2%. Details of Trump’s “Liberation Day” tariff plans, which will take effect immediately after they are announced at 2000 GMT, were still being formulated and closely held. Europe will respond to the likely implementation of tariffs by Trump in a proportionate manner but will not escalate tensions under any circumstances, French industry minister Marc Ferracci said. “Ahead of today’s announcement, fears about stagflation in financial markets continued to mount,” Deutsche Bank strategist Jim Reid said. “The other big unknown from here is how other countries might retaliate, even though we have a pretty good sense that they’re likely to do so.” The effect of US tariffs on Italian companies will be massive, the head of national industry lobby Confindustria warned.
A lack of clarity on the size and scope of US tariffs and the response from other countries has rattled sentiment, pushing the STOXX 600 to over two-month lows this week, about 5.2% below the all-time high hit in March. The healthcare sector fell 2.2% and was set to erase all of the gains made this year. Sanofi shares fell 4%, Roche Holding 2.1%, Novartis 1.7% and Novo Nordisk 3.5%. “We are going to have a fresh tariff announced later on and that’s caused a lot of jitters across the market so it’s not surprising that pharma stocks have been caught up in this wave of nervousness,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown. Novo Holdings, the drugmaker’s controlling shareholder, nearly doubled annual income and investment returns to a record 8 billion euros ($8.66 billion) in 2024, although its total assets under management dropped slightly. Meanwhile, shares of Svitzer soared 31.1% after Denmark’s A.P. Moller Holding made a cash offer of 9 billion Danish crowns ($1.30 billion) for the towage and marine service provider. Shares in Grifols rose 10.9% to the top of the benchmark index after report Canada’s Brookfield has resumed contacts with the Spanish pharmaceuticals company to launch a new takeover bid.