European equities edged higher Monday, buoyed by healthcare stocks after new clinical findings boosted Novo Nordisk. Shares in the Danish pharmaceutical company rose 2.8% in Copenhagen after data indicated that its weight-loss drug Wegovy provided stronger heart-protection benefits than a competing treatment from Eli Lilly.
The rebound follows weeks of pressure on Novo’s stock after the company cut its 2025 sales growth forecast, citing mounting competition from generic versions of Wegovy. Investors viewed the latest trial results as a sign the company may retain a competitive edge in the fast-expanding obesity treatment market.
The rally lifted the pan-European Stoxx 600 by 0.4%, while regional indexes also advanced: Germany’s DAX gained 0.5%, the U.K.’s FTSE 100 added 0.3%, and France’s CAC 40 rose 0.3%.
Defense Stocks Gain on Norway-UK Deal
Defense companies also pushed higher after Norway announced a £10 billion strategic partnership with Britain to procure new naval frigates. The agreement bolstered optimism for European defense suppliers at a time of heightened global security concerns.
Shares in U.K.-based BAE Systems advanced following the news, reflecting expectations of expanded order books across the sector. Analysts note that ongoing geopolitical tensions in Europe and beyond continue to support defense valuations, making the sector a steady contributor to equity market gains this year.
Key drivers supporting defense shares:
- Norway-UK partnership: £10 billion frigate deal.
- BAE Systems boost: Shares gained on order optimism.
- Geopolitical backdrop: Heightened demand for defense equipment.
U.S. Tariffs and Market Sentiment
Investor sentiment was also shaped by a U.S. court decision late Friday rejecting many of former President Donald Trump’s sweeping tariffs. While tariffs remain in place until at least mid-October, when the White House can appeal to the Supreme Court, the ruling added an element of policy uncertainty.
Analysts at ING cautioned that global markets may not fully celebrate until legal proceedings conclude, but noted that the Treasury market could face pressure if Washington is forced to return tariff revenues. Reports suggest the Trump administration anticipated a legal battle and remains confident the Supreme Court’s conservative majority will ultimately back its authority to impose tariffs.
With U.S. markets closed for Labor Day, trading volumes in Europe were expected to remain thin. Still, Monday’s modest gains underscored resilience in European equities, supported by health care strength, defense deals, and cautious optimism on global trade policy.
