European Markets Stage Friday Rally as Novo Nordisk Rebounds Sharply
European equity markets turned decisively higher during a volatile trading session on Friday, with a powerful rebound in pharmaceutical giant Novo Nordisk A/S helping to offset significant weakness in the automotive sector. The benchmark Stoxx Europe 600 Index closed the day with a solid gain of 0.9%, showcasing resilience amid mixed sectoral performances.
Pharma and Construction Lead Gains as Autos Plunge
The session was dominated by a dramatic recovery in Novo Nordisk shares, which surged by 5.3%. This rebound came after the stock had lost approximately a quarter of its market value earlier in the week. The sell-off was triggered by investor concerns regarding a potential copycat version of its highly successful Wegovy obesity treatment. The recovery was bolstered by Svenska Handelsbanken AB upgrading its recommendation on the stock from sell to buy, providing a significant confidence boost to the market.
Construction stocks, energy companies, and banking shares were among the other notable outperformers, contributing strongly to the index's advance. French construction and concessions group Vinci SA led the charge in the construction sector, rallying an impressive 9.9% following the announcement of robust earnings projections for 2025.
In stark contrast, the automotive sector emerged as the biggest laggard. Stellantis NV, the multinational automotive manufacturing corporation, plunged by a staggering 25%. This dramatic decline followed the company's announcement of approximately €22 billion (equivalent to $25.9 billion) in charges. These charges are linked to a comprehensive strategic overhaul, necessitated by persistently high operational costs and disappointingly muted sales in the electric vehicle segment.
Europe Outperforms US Markets Amid Tech Sell-Off
Analysts noted that Europe's benchmark equity index has recently outperformed its US counterparts, which have been adversely affected by a pronounced sell-off in technology shares. Supporting this trend, data from Bank of America Corp., citing EPFR Global, revealed that European equity funds attracted substantial inflows of $4.2 billion in the week through Wednesday. This represents the largest weekly inflow since April, indicating renewed investor interest in the region.
"Europe has much less exposure to the technology sector than the United States, so it is logical that it is outperforming at this moment," commented Laurent Lamagnere, Deputy Chief Executive Officer at Alphavalue in Paris. "However, it is important to recognize that the primary winners in the artificial intelligence revolution are currently in China and the US, not Europe. Consequently, the long-term positioning of European stock markets may not be as favorable from a structural growth perspective."
Notable Individual Stock Movements
Beyond the major indices, several individual stocks posted significant movements. Kongsberg Gruppen ASA, the Norwegian technology conglomerate, saw its shares soar by 16%. This sharp increase was driven by the company reporting exceptionally strong financial results, which were significantly boosted by the robust performance of its defense and aerospace divisions.
The trading day underscored a market navigating sector-specific headwinds and tailwinds. While concerns in the auto industry and broader economic pressures persist, selective strength in pharmaceuticals, construction, and defense-related industries provided enough momentum to push the broader European market into positive territory for the session.
