By Johann M Cherian and Nikhil Sharma
(Reuters) -European shares finished marginally higher on Monday, supported by defence stocks, while Novo Nordisk gained after data showed its weight-loss drug Wegovy delivers stronger heart-protective benefits than Eli Lilly’s rival therapies.
The pan-European STOXX 600 closed up 0.17% at 551.07, with gains led by the aerospace and defence index, which surged 2.1% to hover near a record high.
Defence giants, Rolls-Royce Holdings, Rheinmetall and Hensoldt advanced between 2.8% and 4.5%.
Gains followed a Financial Times report that European Commission President Ursula von der Leyen said Europe was preparing “pretty precise plans” to send troops to Ukraine as part of post-conflict security guarantees.
“The possibility of additional support for Ukraine can only be beneficial as far as (European) stocks are concerned and investors are really buying into that,” said Fiona Cincotta, senior market analyst at City Index.
Britain’s BAE Systems was up 1.8%, as Norway said it had chosen Britain for the acquisition of new frigates, in a deal worth some 10 billion pounds ($13.51 billion).
Danish drugmaker Novo Nordisk, the fourth-largest healthcare company on the STOXX index, rose 1.8% after the company said Wegovy cut the risk of heart attack, stroke or death by 57% versus Eli Lilly’s rival medicines Mounjaro and Zepbound in a real-world comparison.
The stock bolstered the healthcare index, rising 0.27%. Denmark’s main stock index gained 1.1%, also aided by Novo’s domestic peer Zealand Pharma that ended 3.5% higher.
Overall gains were limited by a jump in long-dated euro zone bond yields on persistent worries about government debt levels around the world.
Germany’s 30-year yield rose as much as to a 14-year peak of 3.381% before cooling to 3.36%, up 2 basis points.
Utilities, often traded as a bond proxy, fell 0.9% to lead sectoral losses on STOXX 600.
Meanwhile, U.S. tariff policy remained a key focus after a U.S. appeals court ruled on Friday that most of U.S. President Donald Trump’s tariffs are illegal, but left them in place until mid-October to permit further appeals.
Trump has vowed to take the case to the Supreme Court and trade experts say the administration is preparing alternative plans to be able to proceed with its tariffs.
The European Union has struck a deal with the U.S., while the Swiss continue to negotiate, although broader trade uncertainty has subsided since April.
Goldman Sachs was the latest among major brokerages to raise its STOXX 600 target for the next 12 months, lifting it to 580 from 570.
Orsted gained 3.5% after Norway’s Equinor pledged to support its planned $9.4 billion rights issue as the Danish offshore wind developer seeks to bolster its balance sheet as both companies navigate regulatory hurdles in the U.S. offshore wind market.
On the data front, euro zone manufacturing activity expanded in August for the first time since mid-2022 due to a surge in domestic demand and output.
Investors geared up for this week’s U.S. jobs report, which could sway expectations for the Federal Reserve’s next policy move at its meeting later this month.
Trading was light throughout the day due to a U.S. holiday.
(Reporting by Tristan Veyet in Gdansk and Johann M Cherian in Bengaluru; Editing by Sherry Jacob-Phillips and Mrigank Dhaniwala)
