Pharma stocks fall after Trump’s drug price comments

European shares ended off highs on Wednesday as pharma stocks turned lower on worries over pricing pressure in the US following remarks by US president-elect Donald Trump in his first news conference.

Europe’s index of healthcare stocks fell 0.7 per cent, weighing on the region’s benchmark Stoxx Europe 600 index which inched up 0.2 per cent at the close.

DUBLIN

The Iseq index closed up 0.25 per cent, having moved sideways for most of the session. Building materials group

CRH

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advanced 1.25 per cent to €32.70, while

Ryanair

finished down slightly at €14.84.

Paper and packaging group Smurfit Kappa fell 1 per cent to €23.90, after some profit-taking in the stock, which has been on a run of decent gains of late.

Paddy Power Betfair fell 0.6 per cent to €100.50. The stock was a little subdued in the wake of a profit warning from William Hill earlier in the week.

Tullow Oil, which has its main stock listing in London, added 0.65 per cent in Dublin, closing at €3.72 on a day when it announced that chief executive Aidan Heavey would be stepping down. Mr Heavey had been in the role for more than 30 years, although the news was still a surprise to investors, one Dublin-based dealer said.

LONDON

The blue-chip FTSE 100 rose 0.2 per cent to a new record high, closing higher for the 12th consecutive session in its longest winning streak in the index’s 33-year history.

Mr Trump’s comments on the need for competitive drug pricing – including the remark that pharmaceutical companies are “getting away with murder” by charging high drug prices – prompted a sell-off in pharma stocks.

London-listed drugmakers Shire and AstraZeneca fell 3.2 per cent and 1.8 per cent, leading losers in their sector.

Elsewhere, retail stocks were back in focus after a well-received update from British grocer Sainsbury. Its shares rose as much as 7.8 per cent after it beat forecasts for underlying sales in its Christmas quarter.

The stock ended off its intraday highs, however, closing with a gain of 1 per cent. This followed peer Morrison's strong performance in the previous session after it too reported robust figures.

EUROPE

In Germany, the Dax closed up 0.5 per cent, while the Cac 40 in France was flat.

Swiss pharma heavyweights Novartis and Roche both fell more than 1 per cent following Mr Trump's remarks.

Italy's Mediaset rose 5.9 per cent, topping gainers on the Stoxx. Traders cited a report that Vivendi chief executive Vincent Bolloré could offer a stake in French media group Vivendi to the Berlusconi family in a bid to end a dispute over control of the Italian broadcaster.

Another stock to make gains was Danish bioscience company Chr Hansen, which rose 5.1 per cent following consensus-beating first-quarter earnings.

US

The Nasdaq lost ground in choppy trading on Wednesday as investors fled drug stocks. The S&P 500 healthcare index reversed course following Mr Trump’s remarks and fell as much as 1.9 per cent. After paring losses it was still down 1.2 per cent in the early afternoon, New York time, and on track for its worst day since November 22nd.

The Nasdaq biotechnology index sank 3.1 per cent and was on track for its worst day in three months. The pullback ended a six-day winning streak for both indexes.

The CBOE Volatility index, also called Wall Street's "fear gauge", spiked as much as 6.4 per cent before creeping back and was last was up 1 per cent. Lockheed Martin, down 0.55 per cent in afternoon trading, pared losses after falling as much as 1.3 per cent when Mr Trump said the F-35 fighter jet programme was "billions over budget" and behind schedule.

Five of the 11 major S&P sectors were lower. Helping limit losses was a spike in energy stocks, which rose 1.3 per cent as crude prices jumped more than 3 per cent.

Additional reporting: Bloomberg/Reuters