Home ›› 13 May 2023 ›› Stock
European shares rose on Friday after upbeat results from Richemont underscored strength in the luxury sector, while investors assessed inflation data from France and Spain for signals on the European Central Bank’s interest rate hike plans.
The pan-European STOXX 600 index (.STOXX) gained 0.6%, turning slightly positive for the week.
Richemont (CFR.S) jumped 6.5% to a record high as the luxury goods group beat expectations after strong demand from Chinese consumers for jewellery and watches boosted net profit and sales in the 12 months through March.
Shares of other luxury firms such as Kering (PRTP.PA) and LVMH (LVMH.PA) gained more than 1% each, while Europe’s personal & household goods (.SXQP) gained 1.3%, reported Reuters.
“Luxury is doing very well because the Chinese story is more about domestic recovery, not so much manufacturing. What we’re getting out of China and the way it affects the European market is very uneven,” said Anthi Tsouvali, a multi-asset strategist at State Street Global Markets.
“Within Europe, we’re more positive on defensive sectors versus cyclicals.”
Despite some upbeat earnings, the STOXX 600 has traded in a tight range in the recent weeks as investors remain concerned about the possibility of a U.S. recession and further interest rate hikes from the ECB.
Data showed Spanish national consumer prices rose 4.1% in the 12 months through April, while French inflation rose 6.9% - both in-line with economists’ estimates.
The ECB’s latest interest rate hike won’t be the last as it needs to ensure the current wave of inflation comes to an end, said ECB policymaker Joachim Nagel.
Troubled Swedish real estate group SBB (SBBb.ST), whose shares have plunged recently on debt concerns, erased early gains and was last down 1.5% after it sold most of its shares in construction company JM (JM.ST) for 2.8 billion Swedish crowns ($275.8 million).
Europe’s real estate sector (.SX86P) dropped 0.9%, on track for weekly declines.
