Adidas and luxury goods giant Louis Vuitton pull European shares higher

Investors put aside concerns over conflict in the Middle East for now

Consumer companies as diverse as Adidas and luxury goods giant Louis Vuitton LVMH posted earnings that lifted investors' spirits

European stock markets gained despite the conflict in the Middle East after consumer companies as diverse as Adidas and luxury goods giant Louis Vuitton LVMH posted earnings that lifted investors' spirits.  

The continent-wide Stoxx 600 ticked higher, after notching its biggest one-day drop in over nine months in the previous session. Adidas shares soared 8.6% to an over two-year high, topping Germany's blue-chip index, as the sportswear company hiked its outlook for 2024 after posting better-than-expected preliminary results for the first quarter.

LVMH ended almost 3% higher after the world's largest luxury group's first-quarter sales offered some reassurance to investors concerned about the industry's outlook. 

With other luxury names Hermes and Richemont also climbing, the broader sector index also rose. "Resilient global growth and improving consumer and business confidence should allow for favourable first-quarter earnings," said Joaquin Kritz Lara, chief economist at Numera Analytics.

However, capping gains, technology stocks dropped more than 3%, hauled down by ASML's slide after Europe's biggest tech firm reported weaker-than-expected first-quarter new bookings. With interest rates at record highs, investors are keeping a close eye on the health of corporate Europe this earnings season. 

Technology stocks are in the spotlight, having spearheaded the Stoxx 600's rally since late last year on euphoria around artificial intelligence.

Data showed eurozone inflation slowed across the board in March, reinforcing expectations for a European Central Bank interest rate cut in June, even as rising energy costs and a weak euro cloud the outlook. 

On the policy front, ECB board member Piero Cipollone noted plenty of fresh data in June and July could bolster the case for rate cuts, while Bundesbank president Joachim Nagel highlighted the eurozone's price pressure could continue for some time. 

Reuters