By Sruthi Shankar and Shashwat Chauhan
(Reuters) -Europe's STOXX 600 clocked its second straight weekly fall on Friday, with the healthcare sector leading losses after Danish firm Novo Nordisk (NYSE:NVO) tumbled on disappointing data from its next generation obesity drug trial.
The pan-European STOXX 600 index closed 0.9% lower, paring some losses after falling as much 2% during the session, clocking a near 2% drop for the week, its worst week since early September.
Novo Nordisk plunged 20.8% after the Danish drugmaker revealed disappointing results in a late-stage trial for its experimental next-generation obesity drug CagriSema, wiping as much as $125 billion off its market value.
The broader healthcare sub-sector dropped 4%, while the Danish benchmark tumbled 13.2% to its weakest close since August 2023.
While most STOXX sub-sectors fell, real estate was a rare bright spot with a 1.4% advance.
Further dampening sentiment, U.S. President-elect Donald Trump said that the EU must purchase U.S. oil and gas to make up for its "tremendous deficit" with the world's largest economy, or face tariffs.
"Trump's deeply flawed understanding of trade balances and drivers is being applied once again and to a degree this kind of thing was expected by the EU and others," Scotiabank (TSX:BNS) analysts wrote in a note.
The European Commission said it was ready to discuss with Trump how to strengthen what it described as an already strong relationship, including in the energy sector.
"Investors had already begun pricing in the potential risk, but the President-elect's comments today will have focussed minds," said Danni Hewson, head of financial analysis at AJ Bell.
Britain's FTSE 100 posted a relatively smaller decline, down 0.3%. Data showed British retail sales rose by a weaker-than-expected 0.2% in November, adding to signs of slow momentum in the economy.
European stocks tumbled on Thursday after the Federal Reserve projected fewer interest rate cuts in 2025 and higher inflation, halting a stunning rally in U.S. and European stocks that were supported by hopes of easing monetary policy.
On the day, data showed U.S. consumer spending increased in November, underscoring the economy's resilience.
The STOXX 600 is up nearly 6% so far this year compared with a 25% surge in the U.S. benchmark S&P 500.
Idorsia (SIX:IDIA) tumbled 50.4% after the Swiss biopharma company said exclusive talks for global rights to hypertension medication Tryvio had stalled.
Zealand Pharma (NASDAQ:ZEAL) dropped 3.8% after the U.S. FDA declined to approve the Danish biotech group's bowel disease drug.