Under the threat of tariffs, European stocks rose instead of falling. Strategists: A pullback in pharmaceutical stocks may be a good entry opportunity
European stock markets opened higher on Thursday, with investors reacting calmly to Trump's threat to impose tariffs on patented drugs, as the Stoxx 600 index rose by 0.3%. The healthcare sector fell by 0.2%, with Novo Nordisk and Zealand Pharma dropping by 1.7% and 2.2%, respectively. Strategist Sophie Huai believes this is a good opportunity to increase holdings in European stocks, despite the tension in the pharmaceutical industry. The market is focused on the Federal Reserve's inflation indicators to seek clues about the state of the U.S. economy
The Zhitong Finance APP noted that European stock markets opened higher on Thursday, as investors did not overreact to President Trump's threat to impose tariffs on patented drugs.
As of the time of publication, the Stoxx Europe 600 index was up 0.3%. The healthcare sector fell 0.2%, after Trump stated that unless manufacturers establish production bases in the U.S., he plans to impose a 100% tariff on patented drugs starting October 1. Novo Nordisk (NVO.US) fell 1.7%, and Zealand Pharma dropped 2.2%.
Sophie Hu, portfolio manager and strategist at BNP Paribas Asset Management, said: "This could be a good opportunity to increase holdings rather than short European stocks. The pharmaceutical industry is an important sector but has strong country-specific characteristics. This will create tension, but investors need to look at the bigger picture."
European stock markets have been fluctuating within a narrow range as investors weigh the prospects of U.S. interest rate cuts. Later today, the market's focus will shift to the Fed's preferred inflation gauge—the Personal Consumption Expenditures Price Index—for clues about the state of the U.S. economy.
In other individual stock news, STMicroelectronics briefly fell 1.6% following reports that the Trump administration is considering plans to reduce U.S. reliance on overseas chips
