European stock markets hit a four-week low on Friday as investors worried about the impact of fresh US tariffs on dozens of countries, including a 39 per cent rate on Switzerland.
Mr Trump continued his tariff blitz, announcing steep levies on exports from dozens of trading partners including Canada, Brazil, India and Taiwan with countries not listed subject to a base 10 per cent rate ahead of a Friday trade deal deadline.
Healthcare stocks dropped 1.6 per cent after US president Donald Trump sent letters to the leaders of 17 major pharmaceutical companies, including Novo Nordisk and Sanofi, outlining how they should slash US prescription drug prices.
Denmark-listed Novo Nordisk shed 4.9 per cent, falling to an almost four-year low. Shares of the Wegovy-maker are also set for the steepest-ever weekly fall.
“Trump is trying to force these foreign companies to reduce the cost of drugs and medicines exported to the US in order to balance the cuts in subsidies with the big beautiful bill,” said Mabrouk Chetouane, head of Global Market Strategy at Nataxis Investment Managers.
“I think the pressure will be extremely strong on the healthcare sector because the US is clearly one of the markets where margins are quite significant.”
The pan-European Stoxx 600 index fell 1.3 per cent, down for the third straight session and on track to end the week in the red.
The benchmark index has slipped 4.4 per cent from its March peak, after coming within 2 per cent of that level earlier this week, dragged down by a record plunge in Novo Nordisk shares following a profit warning, and as investors assess the implications of the US-EU trade deal.
Germany’s blue-chip DAX shed 1.7 per cent, while Denmark’s OMXC fell 3 per cent to a nearly two-year low. Most regional bourses were in the red. Stock markets in Switzerland were shut for a holiday.
Asian markets were also on the slide.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.1 per cent to bring the total loss this week to 2.2 per cent, the biggest since April. South Korea’s KOSPI plunged 3.5 per cent while Taiwanese shares fell 0.5 per cent.
Japan’s Nikkei dropped 0.6 per cent. Chinese blue chips fell 0.7 per cent and Hong Kong’s Hang Seng index lost 0.8 per cent.
Overnight Wall Street failed to hold onto an earlier rally. Data showed inflation picked up in June, with new tariffs pushing prices higher and stoking expectations that price pressures could intensify, while weekly jobless claims signalled the labour market remained on a stable footing.
Late on Thursday, Mr Trump signed an executive order imposing tariffs ranging from 10 per cent to 41 per cent on US imports from foreign countries. Rates were set at 25 per cent for India’s US-bound exports, 20 per cent for Taiwan’s, 19 per cent for Thailand’s and 15 per cent for South Korea’s.
He also increased duties on Canadian goods to 35 per cent from 25 per cent for all products not covered by the US-Mexico-Canada trade agreement, but gave Mexico a 90-day reprieve from higher tariffs to negotiate a broader trade deal.
“The latest tariff announcement offers some surface-level clarity, but beneath it lies a fog of uncertainty,” said Thomas Rupf, Chief Investment Officer, Asia of VP Bank.
“Despite some countries securing better terms, the overall impact is negative. We’re entering an era of higher barriers to trade, which will have an impact and hurt growth.” - Reuters
