Luxury Stocks Drag European Shares Lower on LVMH Disappointment

Reuters

17:03 JST, October 11, 2023

European stocks slipped on Wednesday after sharp gains in the previous session, as luxury giant LVMH dragged the sector lower on disappointing sales, though Novo Nordisk jumped after positive update on its diabetes drug Ozempic.

The pan-European STOXX 600 index .STOXX dipped 0.2% by 0707 GMT.

The benchmark rallied almost 2% on Tuesday to record its biggest one-day gain in 11 months, boosted by dovish comments from U.S. Federal Reserve policymakers.

LVMHLVMH dropped 6.7% to touch a more than 10-month low after the luxury goods bellwether reported a 9% rise in third-quarter revenue, marking slower growth as a strong wave of post-pandemic spending eases.

Shares of other French luxury majors such as Hermes HRMS and Kering PRTP fell 2.5% and 2.7%, respectively. Swiss luxury firms Richemont CFR fell 5.3% and Swatch Group UHR dropped 2.9%.

Novo NordiskNOVOb.CO, however, jumped 3.8% after the Danish drugmaker said it would stop a trial studying Ozempic to treat kidney failure in diabetes patients ahead of schedule because it was clear from an interim analysis that the treatment would succeed.

Shares of German kidney dialysis provider Fresenius Medical CareFMEG sank 18.6%.