Europe's STOXX 600 closes higher on healthcare boost; auto stocks slide

Updates to market close

By Nikhil Sharma and Johann M Cherian

Feb 5 (Reuters) - European shares ended Wednesday's choppy session higher, as a rise in healthcare companies GSK and Novo Nordisk following their upbeat quarterly results offset losses in carmaker stocks.

The pan-European STOXX 600 index .STOXX reversed early losses and settled up 0.36%, with healthcare .SXDP leading sectoral gains with a 2.1% jump.

Novo Nordisk NOVOb.CO rose 4.5% after the drugmaker posted a better-than-expected fourth-quarter profit of $4.4 billion as sales for its blockbuster drug Wegovy more than doubled. However, the largest European company by market capitalization forecast slower sales growth this year.

"There are also some concerns emerging about long-term tolerability. But there’s still a long way to run given the profound health economic impact this class of drug promises to deliver," said Derren Nathan, head of equity research at Hargreaves Lansdown.

GSK GSK.L rose 7.6% after the British drugmaker launched a $2.5 billion share buyback plan, while also posting upbeat quarterly results and lifting its 2031 sales target.

Limiting gains on the STOXX index, automobile stocks .SXAP fell 1.4%, bogged down by Renault's RENA.PA 2.6% drop, after a report said Japan's Nissan 7201.T would call off merger talks with rival Honda 7267.T.

Out of the 67 companies in the STOXX 600 that have reported fourth quarter earnings as of Tuesday, 53.7% exceeded analyst estimates, compared with 54% in a typical quarter, according to data compiled by LSEG.

European equities, along with their global peers, started the week on a sour note after U.S. President Donald Trump's tariff threats, but rebounded a day later when he agreed to pause levies on goods from Mexico and Canada and said he was open to negotiations.

Trump, however, followed through with tariffs on China, which retaliated in kind, although the fallout of that has been limited on global stocks.

On the European Central Bank monetary policy outlook, investors awaited the updated estimates for the so-called neutral rate due on Friday. The neutral rate is the interest rate level with full employment and stable inflation.

Among others, Santander SAN.MC soared 8.2% after the lender beat fourth-quarter profit estimates and announced a share buyback plan worth 10 billion euros ($10.39 billion).

Vestas VWS.CO jumped to the top of the STOXX index, up 8.2% after the world's biggest wind turbine maker, announced a share buyback and reported upbeat fourth-quarter results.

The Danish stock index .OMXC20 surged 2.9%, logging its steepest one-day jump in more than one week.

Munters MTRS.ST slid more than 10.2% to the bottom of the STOXX after the Swedish maker of air treatment solutions reported what analysts say were "mixed" fourth-quarter results.