By Shreyashi Sanyal
(Reuters) -European shares closed lower for the second straight session on Wednesday, weighed down by a slide in healthcare stocks after Brussels published a long-awaited draft of its proposed overhaul of laws governing the European Union's pharmaceuticals industry.
The pan-European STOXX 600 index fell 0.8%, with healthcare stocks tumbling 2.5%, clocking its worst performance since late January, 2022.
The proposal, which is the biggest overhaul of existing medical laws in two decades, is aimed at ensuring all Europeans have access to both innovative new treatments and generic drugs, and ending huge divergences in access and price between countries.
"It's all about trying to get healthcare costs down, and at the end of the day that really translates as spending less. And of course, the read-across is less money available in the industry for spending on drugs and medical products etc," said Stuart Cole, chief macro economist at Equiti Capital.
Shares of some of Europe's biggest drugmakers including Roche, Novo Nordisk (CSE:NOVOb), GSK and AstraZeneca (NASDAQ:AZN) fell between 2.5% and 3.9%.
Earnings from the sector was mixed, with Roche reporting a drop in first-quarter sales, while GSK beat quarterly analyst expectations.
The STOXX 600 index is still tracking monthly gains of 1.1% as more earnings pour in.
Telia Company AB rose 5.3% after the Swedish telecom operator posted first-quarter core earnings above market expectations.
Shares of Swiss banking software company Temenos AG jumped 13.4% after it reported first-quarter earnings above consensus.
Kindred Group Plc jumped 16.0% after the company initiated a review of strategic alternatives, including a merger or sale of the company.
ASM International NV fell 7.5% after the Dutch semiconductor equipment maker reported a drop in first-quarter orders, citing softening market conditions, despite an estimate-beating revenue.
Dassault Systemes SE slid 6.8% after the French software maker reported first-quarter numbers broadly in line with estimates but with a miss on software licences.
Teleperformance SE slumped 14.0%, to the bottom of the STOXX 600, after the French outsourcing group said it intends to buy rival Majorel Group Luxembourg SA for 3 billion euros ($3.3 billion).
Investors now await the European Central Bank's monetary policy meeting next week. A Reuters poll of economists suggested that ECB will almost certainly add 25 basis points to its deposit rate on May 4 and then take it to 3.50% or higher in June.