Luxury companies, chip makers lift European STOXX 600 to highest level in five weeks Reuters
By Shashwat Chauhan and Pranav Kashyap
(Reuters) – European stocks rose nearly 1% on Thursday, with luxury stocks buoyed Richemont (SIX:) updated upbeat earnings and semiconductor companies making gains after TSMC posted record quarterly profit.
The pan-European index rose 0.9% to 519.81 points, the highest level since mid-December.
France’s benchmark index, which includes major luxury stocks, rose to a near three-month high, outperforming other bourses in the region.
Shares in Richemont rose 16.3% after the owner of jewelry brand Cartier beat quarterly sales expectations, a positive sign for the high-end luxury sector during the key holiday season.
A benchmark of European luxury companies advanced 6.7%, posting its best day in nearly four months. LVMH shares jumped by 9.1%, Dior by 8.6%, Kering (EPA:) gained 4.6% and Hermes rose 4.9%.
Deutsche Bank (ETR:) said the results “will add to the argument that more premium luxury brands are likely to perform better, that the slowdown in luxury is more cyclical than structural (at least at the high end) and that there is enough growth in the rest of the world to offset the weakness China.”
The technology index, which includes most European chipmakers, advanced 1.9% after TSMC, the world’s largest contract chipmaker, posted a record quarterly profit and said it expected strong revenue growth in the first quarter.
The STOXX index’s gains on the day added to Wednesday’s jump, its biggest one-day gain in four months, after a drop in U.S. core inflation held off a potential rate cut by the Federal Reserve.
On the macro front, the European Central Bank was set to cut interest rates cautiously and gradually, but further policy easing was likely to follow as price pressures eased, according to reports from its December 11-12 meeting.
“The level of expectation in Europe is relatively low and therefore there is the possibility of some positive surprises,” Fiona Cincotta, senior market analyst at City Index.
Global markets were nervous about the implications of US President-elect Donald Trump’s proposed policies, including trade tariffs, and as a flurry of US data recently fueled fears of a smaller Fed rate cut.
After the inflation data, retail sales rose 0.4% in December, compared with the 0.6% rise expected by economists polled by Reuters.
Investors are now gearing up for the first wave of earnings in Europe and Trump’s inauguration on January 20.
Among other notable stock moves, Zalando rose 8.6% after Europe’s biggest online retailer said it expects 2024 profit to beat its forecast.
Orion added 7% after the Finnish drugmaker raised its 2024 revenue and operating profit outlook.
Airbus subsequently rose 1.8%. Morgan Stanley (NYSE: ) named the plane maker its top pick among aerospace companies.
