Europe’s main shares indices were dragged lower by plunging luxury stocks after LVMH reported slower-than-expected second-quarter revenue growth, reviving concerns about weak Chinese demand.
Dublin
Performing in line with its European counterparts, the Iseq index shed 0.6 per cent in trading in a session that finally brought some relief for Ryanair. The airline’s share price improved by 1.1 per cent to €13.78 after a more than 21 percentage point slump over the previous two sessions following Monday’s trading update.
There were modest gains for agribusiness group Origin Enterprises, which added 0.7 per cent to close at €3.05 per share, while shares in airline software company Datalex jumped 0.5 per cent to 42c per share.
Kingspan, meanwhile, plunged 2.5 per cent to €82.30 per share, while home-builders Cairn and Glenveagh dropped 1.3 per cent and 0.6 per cent to €1.88 and €1.37 per share respectively.
In London Greencore’s shares advanced by more than 1 per cent to £181.80 after the Dublin-headquartered convenience food group upgraded its full-year earnings guidance on the back of increased revenue.
London
Britain’s benchmark FTSE 100 was flat on the session, with the FTSE 250 down by more than 1 per cent.
Personal goods stocks declined 1.3 per cent. Luxury group Burberry slipped 2.1 per cent after the world’s biggest luxury group LVMH’s sales growth slowed in the second quarter.
The sector led broader losses in the market, with most sub-sectors, including financial stocks and energy companies, trending lower.
Automobile and parts followed mining stocks with a 2.1 per cent rise. Aston Martin jumped 6.5 per cent after the luxury carmaker reported its half-yearly results.
Ascential, meanwhile, surged by close to 26 per cent to the top of the FTSE 250 after Informa said it had agreed to buy the Cannes Lions Festival owner for £1.2 billion.
Investors await an update from Lloyds of London on Thursday, which kicks off the UK bank results season.
Europe
Weighed down by falling luxury stocks, the blue-chip Stoxx 50 index lost more than 1 per cent while the cross-Continental Stoxx 500 shed 0.7 per cent.
Luis Vuitton owner LVMH plunged 4.5 per cent in trading after reporting revenue growth of just 1 per cent on an organic basis to €20.98 billion in the three months to June – a slower pace than in the first quarter and below consensus expectations for a 3 per cent rise. Sales in Asia excluding Japan, which is dominated by China, fell 14 per cent in the second quarter, exacerbating concerns about luxury demand in the world’s second largest economy.
Negative sentiment was palpable across the sector with Gucci-owner Kering also down 4.5 per cent, while Cartier-owner Richemont shed 1.7 per cent and luxury bag-maker Hermes tumbled 2 per cent.
It was a mixed session, meanwhile, for European banks after several big lenders reported numbers on Wednesday. Shares in Spanish lender Santander surged 2.7 per cent after reporting a record net profit, up 20 per cent year-on-year. Shares in Deutsche Bank slid by more than 8 per cent after surprising investors by announcing an axing of plans for another share buyback and a rise in bad loan charges.
New York
Wall Street fell on Wednesday, with the tech-heavy Nasdaq leading declines after lacklustre quarterly results from Tesla and Alphabet raised questions about the sustainability of the Big Tech and AI-led 2024 equity rally.
Tesla slumped 11.2 per cent and was set to lose over $83 billion in market value from Tuesday’s close if losses hold after the EV-maker reported its lowest profit margin in more than five years and missed second-quarter earnings estimates.
Google parent Alphabet shed 4.1 per cent despite posting a second-quarter earnings beat as investors focused on a slowdown in advertising growth and the company flagged high capital expenses for the year.
Alphabet’s losses underscored the high earnings bar for the so-called Magnificent Seven, a set of megacap tech stocks that have notched double- and triple-digit percentage gains so far in 2024, riding on the optimism around AI adoption and expectations of an early start to the Federal Reserve’s interest rate cuts. – Additional reporting: Reuters, Bloomberg
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