Europe’s STOXX 600 jumps 1% on banks-led recovery; Novo Nordisk slumps

By Ankika Biswas and Pranav Kashyap

(Reuters) -A strong comeback by banks on Wednesday helped Europe’s main stock index log its biggest one-day gain since November, even though the continent’s largest company by market cap Novo Nordisk (NYSE:) slid after trimming its full-year profit outlook.

The pan-European closed 1.5% higher but remained below the key 500-point mark following the recent selloff sparked by U.S. recession fears.

Main indexes in Germany, France, London and Spain also rose 1.5%-2%. Signalling a continued pick-up in investor sentiment, the “fear gauge” volatility index fell for a second day from its highest level since March 2022, hit at the start of the week.

Leading sectoral gains, the banking index jumped 2.7% to notch its best single-day gain in more than a year, having lost 11% over the past five days, with ABN Amro jumping 5.6% after raising its full-year net interest income forecast.

Italy’s Economy Minister Giancarlo Giorgetti also said the government has no plans to impose additional taxes on bank profits.

European Central Bank policymaker Olli Rehn said rate cuts can continue if confidence in slowing inflation strengthens in the near future.

Data showed a higher-than-expected rise in German industrial production in June, a day after upbeat industrial orders provided some hope for Europe’s largest economy as it grapples with a likely recession.

“For the embattled German industrial sector, there was actually some better news,” said Elizabeth Martins, senior economist at HSBC.

Notable stock movers included Novo Nordisk, which clocked its steepest one-day fall since August 2022, down 6.7%, following a disappointing profit outlook and weaker-than-expected sales of weight-loss drug Wegovy that stirred worries about stiffening competition from Eli Lilly (NYSE:).

German sportswear maker Puma slumped 10.8% after narrowing its full-year core profit outlook.

Roche climbed 3% on a report the Swiss pharmaceutical company is considering divesting cancer data specialist Flatiron Health.

Just Eat Takeaway jumped 13% after JPMorgan upgraded the online food delivery firm to “overweight” from “neutral”.

Continental rose 6.8% on better-than-expected results and guidance for an even stronger second half.

Maersk fell 2.3% after its second-quarter results, with analysts citing higher capital expenditure guidance as one negative factor. It also expects global container shipping growth to slow from this year’s strong start.