European luxury shares rout is just the beginning

Burberry is facing ejection from London’s FTSE 100 stock index, with its market value down 70% in the past year. File picture

After enduring almost a quarter-trillion hit to their market value in recent months, Europe’s luxury firms may see their stock-market clout wane further as China’s downturn worsens.

Once seen as Europe’s answer to the US “Magnificent Seven” tech megacaps, shares in companies producing high-end clothing, handbags and jewellery are languishing, sapped by a spending slump.