European shares jump over 1% after Democrats sweep US Congress, Novo Nordisk surges

European shares surged more than 1% on Wednesday (Nov 4) following Democrats' victory in both chambers of the US Congress and Novo Nordisk's upgraded forecast. The Stoxx 600 index closed 1.82% higher at 657.40 points, its highest since August 26 and the steepest one-day gain since June 12. The Spanish lender-focused benchmark climbed the most among regional bourses, up 3%.

Toni Meadows, head of investment at BRI Wealth Management, noted that markets typically rise after midterms, though it remains to be seen if the trend will be sustainable. Euro Stoxx banks led the sector-wide gains, with a 4.6% jump marking the steepest one-day rise since early April. Analysts believe the Democrats' control of Congress may limit the US administration's ability to impose requirements or sanctions on European banks operating in the US.

Meanwhile, clean energy stocks like Vestas, Orsted, and Nordex gained between 2.9% and 4.8%, while tech stocks fell 0.2%. Novo Nordisk's shares climbed 5.6% after the company reported adjusted operating profit above expectations and raised its full-year sales and profit forecasts. Other corporate earnings included Heidelberg Materials advancing 9.6% and Pandora gaining 10.9% after posting higher-than-expected third-quarter EBIT.

However, the oil sector suffered a 8% drop in Brent crude, down 2.4%. Euro zone inflation rose to a three-year high in the previous month, raising the possibility of another European Central Bank rate hike in December.