European Stocks Rally as Bond Yields Retreat from Highs
European stock markets saw a positive start to the trading week on Tuesday, with the STOXX 600 index rising close to 1%. The gains were led by healthcare stocks, which climbed 1.4%, the strongest sector performance of the day. Danish biotech firm Genmab stood out with an over 8% jump after announcing positive late-stage trial results for a lymphoma treatment in partnership with AbbVie. The study showed a significant improvement in progression-free survival for patients with diffuse large B-cell lymphoma.
Bond yields in the Eurozone eased slightly after reaching multi-decade highs earlier in the week. Investors have been concerned about France’s high debt levels and political gridlock, which had pushed yields sharply higher in recent sessions. The euro remained near a 17-month low against the dollar, reflecting ongoing fiscal worries in France and political uncertainty in Spain following a snap election announcement.
Other notable movers included Italian drugmaker Recordati, which saw gains after private equity firm CVC raised its takeover offer to 53 euros per share. Spain’s Neinor Homes also rose over 4% after raising its outlook for 2026 and 2027 and announcing new targets for 2028. Additionally, Telecom Plus, the owner of Utility Warehouse, climbed 4% after reporting stronger-than-expected customer growth in the first half of its fiscal year.
Market participants are now turning their attention to upcoming eurozone retail sales data and the start of third-quarter earnings season next week. Meanwhile, expectations for further interest rate hikes from the European Central Bank have been scaled back, with traders now seeing an 80% chance of just one more hike by year-end.