European Markets Tumble Amid Disappointing Drug Trials and Industry Downgrades

European shares fell on Friday following a U.S. Federal Reserve interest rate cut. Drugmaker Novo Nordisk's obesity pill data dragged down the market, and sectors like autos and tech also saw declines. Positive retail data from Britain had little effect on overall market sentiment.

European shares fell on Friday following an interest rate cut by the U.S. Federal Reserve, which had previously spurred a rally in the market. Novo Nordisk's obesity pill data, which disappointed investors, led the stock to drop 5.4%, contributing to the broader health care sector's 1.9% decline.

The pan-European STOXX 600 index closed 1.4% lower, recording a second straight week of gains despite significant losses across major European stock markets, with Spain as the sole exception closing 0.2% lower. Autos experienced the most significant decline among major STOXX sectors, down 3.6%, driven by a 6.8% drop in Mercedes-Benz after a profit margin target cut. Other industry giants like Volkswagen and Forvia also saw steep declines.

Technology stocks retreated 2.7%, with shares of Dutch computer chip equipment maker ASML falling 4.2% following a downgrade by Morgan Stanley. Despite optimistic signals from British retail sales and euro zone consumer confidence, the market sentiment remained largely negative, overshadowed by disheartening results from German producer prices and a downturn in DHL shares influenced by FedEx's poor performance.

(With inputs from agencies.)