(BFM Bourse) – Shares in LVMH, Hermès and Kering registered sharp gains on Friday, supporting the Paris index. Investors are positioning themselves ahead of earnings season next month.
Luxury shines again this Friday. LVMH, Kering and Hermès gained 2.7%, 2.6% and 1.9% respectively around All three shares had lost ground on Thursday.
More broadly, between mid-May and mid-June, luxury saw a market bubble with profit-making and unattractive economic indicators in China, the world’s second-largest luxury market, hot on the heels of the US. In addition, some research departments, notably Deutsche Bank, believed that it was time to be selective in this sector given the high valuations.
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A technical recovery?
Nevertheless, “it may be a good time to get back on the stocks and the market can foresee excellent results for the second quarter, with a recovery in China in the second quarter, certainly helped by a very favorable comparative basis and good growth rates in Europe. As for the US, a deceleration has certainly been observed, but one can believe that it is not catastrophic”, assesses a financial intermediary.
“Luxury stocks had fallen much earlier, so we might observe a slight technical recovery in these securities,” said Jie Zhang, an analyst at independent research firm AlphaValue.
“The week was also rich in economic information, but the luxury sector is very much driven by the macro economy,” she adds.
In fact, luxury remains a sector that is quite sensitive to macroeconomics. However, US retail sales for the month of May, published on Thursday, showed some resistance. They thus advanced by 0.3%, while the economists questioned The Wall Street Journal predicted a fall.
Interviewed by Bloomberg TVLVMH CEO Bernard Arnault said Thursday he was “optimistic” about the luxury market in China, despite signs that raise questions about the state of affairs in the world’s second-largest economy.
“In addition, press reports earlier this week reported that the Chinese government was considering measures to support growth while activity is a bit disappointing in China. This could, for example, concern real estate, which represents about 70% of Chinese household wealth,” adds Jie Zhang .
Earlier this week, several media outlets reported that the Chinese government was considering measures to support the economy. The People’s Bank of China on Tuesday cut one of its key key interest rates for the first time in ten months to boost the recovery.
Julien Marion – ©2023 BFM Bourse