[BENGALURU] European shares fell on Wednesday (Apr 2), weighed by losses in healthcare stocks, as investors awaited tariff plans from US President Donald Trump that some fear could slow global growth and boost inflation.
The pan-European Stoxx 600 index closed 0.5 per cent lower, with Germany’s trade-sensitive DAX falling 0.7 per cent.
Markets waited for details of Trump’s reciprocal tariffs on global trading partners, which will take effect immediately after they are announced at 2000 GMT.
European indexes have been volatile this week in anticipation of the announcement after Trump dampened hopes for more targeted levies. The Stoxx 600 is hovering around two-month lows and is about 5.1 per cent below its all-time high hit in March.
“There’s no doubt (tariffs) will impact risk appetite. The real question is where the pressure points are,” said Filip Carlsson, quantitative strategist at SEB.
A broad shift earlier this year into European equities was starting to fade, Carlsson added.
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French industry minister Marc Ferracci said Europe would respond to tariffs in a “proportionate manner”, while British finance minister Rachel Reeves said London would not rush to counter tariffs and risk undermining a possible trade deal.
European Central Bank (ECB) head Christine Lagarde also warned that Trump’s tariffs would be negative “the world over”, though ECB policymaker Francois Villeroy de Galhau said they would not derail an ongoing decline in European inflation.
The healthcare sector fell 1.7 per cent, leading sector declines and dropping to its lowest level this year. Sanofi and Novartis fell about 1.6 per cent each.
“We are going to have fresh tariffs 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 Nordisk was the biggest drag on the benchmark index, down 2.6 per cent.
Novo Holdings, the drugmaker’s controlling shareholder, nearly doubled annual income and investment returns to a record eight billion euros (S$11.7 billion) in 2024, although its total assets under management dropped slightly.
Separate 25 per cent tariffs on US auto imports will take effect on Apr 3. The automobile and parts sector edged 0.1 per cent lower.
Meanwhile, Svitzer shares soared 30.2 per cent after Denmark’s AP Moller Holding made a cash offer of nine billion Danish crowns (S$1.8 billion) for the towage and marine service provider.
Shares in Grifols rose 3 per cent after Canadian fund Brookfield said it was talking with shareholders, following a report it was considering a new takeover attempt. REUTERS
