(Reuters) – A luxury stocks rally led by Gucci owner Kering and optimism about fewer new coronavirus cases in China on Wednesday pushed a European equity index and German benchmark to new heights.
Kering (PRTP.PA) jumped 6.3% after posting better-than-expected quarterly results. The company remained optimistic about its long-term prospects, although it said it was suspending spending in China to fight viruses.
This has raised other luxury values such as the owner of Louis Vuitton LVMH (LVMH.PA), Christian Dior (DIOR.PA), Hugo Boss (BOSSn.DE) and Burberry (BRBY.L), up from 1% to 3%.
Higher prices for iron ore and base metals boosted China .SXPP and automotive .SXAP sensitive commodity stocks after the country reported its lowest number of new coronavirus cases in two weeks , strengthening the senior medical adviser in Beijing’s forecast for the end of the epidemic by April.
In their second record-breaking session, the pan-European STOXX 600 index closed up 0.6% to 431.16, while the DAX .GDAXI in Frankfurt finished up 0.9%. Investors appeared to be looking past the data showing that the block’s industrial production fell more than expected in December.
“It seems risk appetite is here to stay,” said Edward Moya, senior market analyst at OANDA New York.
“Expectations are growing that … China will be able to reach its goal of doubling GDP and income in the decade to 2020,” he said, referring to comments from a high-profile think tank. Chinese.
But investors have remained alert to a new international spread of the virus and its net economic impact. Analysts and bankers say the opaque Chinese data and lack of precedents hamper clear estimates.
Credit rating agency S&P Global has warned that the likely further slowdown in the Chinese economy could reduce growth in the euro area and the United Kingdom by 0.1 to 0.2 percentage points this year.
Minor Rio Tinto (RIO.L) cited efforts to contain the spread of the virus as a reason for slower shipments of copper concentrate to China.
On the STOXX 600, Evolution Gaming (EVOG.ST) increased by 14% and the engineering company Trelleborg (TRELb.ST) jumped 10% after a better than expected profit.
In the background, the Dutch bank ABN Amro (ABNd.AS) after posting lower than expected fourth quarter net income.
Ambar Warrick reports to Bengaluru; Editing by Shounak Dasgupta, Arun Koyyur and Nick Macfie