European Stocks Rise as Novo Nordisk Boosts Healthcare Sector, Defense Shares Advance

European equities edged higher on Monday, supported by strength in the healthcare sector after Novo Nordisk shares gained on positive drug data, while defense stocks also advanced on a new U.K.-Norway deal.

Healthcare Stocks Drive Gains

The pan-European Stoxx 600 rose 0.4%, buoyed by a 2.8% jump in Novo Nordisk shares.

• Data showed that Novo’s blockbuster weight-loss drug Wegovy offered greater heart-protective benefits than a rival from U.S.-based Eli Lilly.
• The findings came at a critical moment for Novo, which recently cut its 2025 sales outlook amid growing competition from generic versions of Wegovy.

Novo’s rally helped lift healthcare stocks broadly, contributing to gains across European benchmarks:

• DAX (Germany): +0.5%
• FTSE 100 (UK): +0.3%
• CAC 40 (France): +0.3%

Defense Sector Strength

Defense shares advanced following news that Norway will partner with the UK in a £10 billion frigate acquisition program.

• Shares in BAE Systems rose, reflecting optimism over increased defense spending and strategic European defense ties.

Tariff Ruling Keeps Traders Cautious

Investors also digested a U.S. Court of Appeals ruling late Friday that rejected President Donald Trump’s sweeping tariffs.

• Analysts at ING noted that global markets may be cautious until it’s clear whether the U.S. will need to refund tariff revenues.
• The White House has until mid-October to appeal to the Supreme Court, with reports suggesting Trump officials are confident the conservative-leaning court will ultimately uphold his authority on tariffs.

Light Trading Expected

Market activity was muted with U.S. markets closed for Labor Day, limiting global liquidity and trading volumes.