European stock markets advanced on Wednesday, primarily led by a jump in healthcare stocks. The optimism in the healthcare sector was sparked by a deal between the US government and Pfizer, which helped reduce uncertainty for drugmakers.
This boost occurred despite ongoing concerns that a potential US government shutdown could delay the release of the key monthly jobs data.
The main pan-European index, the STOXX 600, gained 0.3% and is heading for its fourth straight day of gains. While the overall mood was positive, performance across national markets was mixed: Spain’s index fell 0.4%, but the UK’s FTSE 100 climbed 0.7% to hit an all-time high.
Healthcare stocks surged 3.1%, marking what could be their largest single-day gain in over a year. The catalyst was the news that Pfizer agreed to lower the price of its prescription drugs in the US Medicaid program in exchange for relief from US tariffs.
Several other pharmaceutical stocks saw significant gains, including Ambu, Sartorius, Merck, Roche, and AstraZeneca. Additionally, Novartis gained 2.5% after the US FDA approved its new oral treatment for a chronic inflammatory skin disease.
On the downside, the technology sector dipped 0.6%, and real estate lost 0.8%. Among individual companies, the UK’s food ingredients maker Tate & Lyle dropped 9.4% after warning that its annual profit and revenue would decline.
Conversely, the Dutch engineering firm Arcadis climbed 8.6% after announcing a new share buyback program.
On the FX front, The US dollar dropped to its lowest value in a week against other major currencies on Wednesday, with the dollar index slipping 0.2%.
This market movement showed signs of investors seeking safety, which boosted low-interest currencies traditionally seen as safe havens, such as the Japanese yen and the Swiss franc.
The dollar fell by 0.5% against the yen, reaching its weakest level in about two weeks, and also lost around 0.2% against the Swiss franc.
At the same time, US government bonds (Treasuries) and gold maintained their strong positions.
Currency Power Balance