Finance
European stocks down after Novo's weak forecast, software companies slide
Published by Global Banking and Finance Review
Posted on February 4, 2026
3 min readLast updated: February 4, 2026
Quick Summary
European stocks are flat as Novo Nordisk's forecast impacts the market, offset by energy gains. Investors await eurozone inflation data.
European Markets Decline as Novo Nordisk Issues Weak Outlook
Market Overview and Key Influences
By Avinash P and Johann M Cherian
Novo Nordisk's Impact on Healthcare Sector
Feb 4 (Reuters) - European shares edged lower on Wednesday, as shares of Novo Nordisk slumped after the weight-loss drugmaker issued a bleak forecast, while investors tracked software shares and awaited a key inflation report.
Software Sector Reactions to AI Developments
The pan-European STOXX 600 slipped 0.3% to 616.14 points by 0920 GMT, with healthcare down 1.9% and leading sector losses.
Bank Earnings and Economic Indicators
Novo Nordisk's shares tumbled 18% and were on track for their biggest one-day drop since July 2025. The Danish company said it expects its sales and operating profit in 2026 to fall year-on-year, strained by price pressures in the U.S. as it battles a competitive weight-loss drug market.
"Even though demand for weight loss drugs is expected to continue to soar, it's just the fact that there are many more new entrants and there's a demand for cheaper pricing. So whereas Novo was the top dog, there are so many others biting at its heels and bringing it down," said Susannah Streeter, chief investment strategist at Wealth Club.
Denmark's stock index slid 7.9% an was on track for its biggest daily fall since July 2025.
Investors were also evaluating the potential repercussions of AI developer Anthropic's launch of plug-ins for its Claude Cowork that analysts said could disrupt the software business worldwide.
Tech and media stocks fell 1.8% and 1.6%, respectively, adding to their steep declines on Tuesday.
"There is a lot of uncertainty around exactly what AI agents can do, and as such investors are choosing to shun the software market altogether, leaving nowhere to hide," said Ben Barringer, head of technology research at Quilter Cheviot.
It was also a big day for bank earnings across the continent.
Credit Agricole fell 3.2% after the French bank reported a 39% fall in fourth-quarter profit, hit by a one-off charge related to its increased stake in Italy's Banco BPM.
UBS <UBSG.S> posted a 56% surge in net profit above analysts' estimates on strong performances from its wealth management and investment banking divisions, and announced plans for more share buybacks. However, its shares dropped 4.3%.
Europe's biggest lender Santander fell 3.6% after the Spanish bank announced it would buy U.S. regional lender Webster Financial in a $12.2 billion deal.
Investors also awaited January eurozone inflation data due later in the day, that economists expect would be below the European Central Bank's 2% target, ahead of an interest rate decision on Thursday.
(Reporting by Avinash P and Johann M Cherian in Bengaluru; Editing by Nivedita Bhattacharjee and Shinjini Ganguli)
Key Takeaways
- •European stocks remain flat amid Novo Nordisk's forecast.
- •Energy stocks rise due to higher crude prices.
- •Healthcare sector leads losses with a 1.9% drop.
- •Danish stock index faces significant decline.
- •Investors await eurozone inflation data.
Frequently Asked Questions about European stocks down after Novo's weak forecast, software companies slide
1What is inflation?
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured as an annual percentage increase.
2What is the STOXX 600?
The STOXX 600 is a stock index that represents the performance of 600 large, mid, and small-cap companies across 17 European countries, serving as a benchmark for European equity markets.
3What is the energy sector?
The energy sector includes companies involved in the production and sale of energy, including oil, gas, and renewable energy sources. It plays a crucial role in the global economy.
