European Stocks Slide as LVMH Earnings Weighs on Luxury Stocks
European stocks dropped on Wednesday as luxury stocks were weighed down by the earnings report of LVMH, the world’s largest luxury goods company.
LVMH Earnings Report
LVMH, the French luxury goods company, reported a 6% drop in first-half sales, with the biggest decline coming from its fashion and leather goods division. The company’s sales in the first half of the year were €19.2 billion, down from €20.5 billion in the same period last year.
The company’s shares dropped by 4.3% in Paris trading, the biggest decline since March. The company’s shares have dropped by more than 10% since the start of the year.
Impact on European Stocks
The decline in LVMH’s shares weighed on other luxury stocks in Europe, with the Stoxx Europe 600 Index dropping by 0.6%. The index has dropped by more than 5% since the start of the year.
The biggest decliners in the index were luxury stocks, with the Stoxx Europe 600 Luxury Goods Index dropping by 1.9%. The index has dropped by more than 10% since the start of the year.
Impact on Other Sectors
The decline in luxury stocks also weighed on other sectors, with the Stoxx Europe 600 Automobiles & Parts Index dropping by 1.2%. The index has dropped by more than 8% since the start of the year.
The Stoxx Europe 600 Banks Index dropped by 0.7%, while the Stoxx Europe 600 Retail Index dropped by 0.6%. Both indexes have dropped by more than 5% since the start of the year.
Impact on Other Markets
The decline in European stocks also weighed on other markets, with the MSCI World Index dropping by 0.3%. The index has dropped by more than 4% since the start of the year.
The decline in European stocks also weighed on the U.S. stock market, with the S&P 500 Index dropping by 0.2%. The index has dropped by more than 3% since the start of the year.
Impact on Currencies
The decline in European stocks also weighed on the euro, with the currency dropping by 0.2% against the U.S. dollar. The euro has dropped by more than 3% since the start of the year.
Outlook
The decline in European stocks is likely to continue in the near term, as investors remain cautious about the outlook for the global economy. The decline in luxury stocks is likely to continue to weigh on other sectors, as well as other markets and currencies.