Louis Vuitton helps drive €65bn buying spree for European shares

The rise helped lift the pan-European Stoxx 600 index to its highest level in two years

Investors added €28bn to its Louis Vuitton value.

Investors dived back into top luxury shares in Europe, adding some €65bn to their stock market value as Louis Vuitton Moet Hennessy, or LVMH, reassured investors about the sector's resilience to economic headwinds, particularly in China.

The buying spree helped recoup some of last year's losses after China's economic revival proved lacklustre following the lifting of covid restrictions.

Shares in LVMH jumped as much as 11%, adding about €28bn to its own stock market value and boosting peers of the French luxury giant including Kering and Hermes. That helped lift the pan-European Stoxx 600 index to its highest level in two years.

LVMH, the world's biggest luxury group and owner of brands including Louis Vuitton, Christian Dior, Hennessy and Tiffany, posted a 10% rise in fourth-quarter sales over the end-of-year trading period, reassuring investors who had grown skittish about the industry's prospects following its previous update in October which showed sales growth had slowed.

LVMH chairman and CEO, Bernard Arnault, said he was happy with the company's current growth rate. With its latest report, LVMH should "steady nerves in the near term", Jefferies analyst James Grzinic said. 

For many investors, LVMH's resilience was reason enough to buy back into the sector again.

Appetite from Chinese shoppers for European fashion brands has been a key source of concern for investors in recent months, as a property crisis and high youth unemployment dashed hopes for a strong rebound, and Chinese travel beyond Asia has been slow to recover. 

Reuters