European stocks rallied again on Friday, benefiting from gains by luxury goods manufacturers and travel-related companies and gains by US stocks after better-than-expected employment data.
The Stoxx Europe 600 SXXP,
rose 0.3% to 484.55, ready for its fifth consecutive closing record, after hitting new highs all week. The index closed at 483.21 on Thursday. For the week, the Stoxx 600 is up 1.9%, which will be the fifth consecutive weekly win.
Among the main regional indices, the German DAX DAX,
gained 0.3%, the CAC 40 PX1,
jumped 0.9% and the UK FTSE 100 UKX,
increased by 0.4%. The euro EURUSD,
and GBPUSD pound,
were both less than a stronger US dollar DXY,
The pound also continued to lose ground after the Bank of England’s surprise inaction on Thursday.
Read: Pound drops near September lows as Bank of England surprise continues to reverberate
New data showed that German industrial production fell in September for the second month in a row, with supply chain bottlenecks weighing on output at factories.
Among the moving stocks, drugmakers were down, with shares of AstraZeneca PLC AZN,
AZN,
fell 1.9% and Roche ROG,
fell 1.3%. Novo Nordisk NVO,
NVO,
stocks fell 3%.
Read: Pfizer shares skyrocket after data shows antiviral COVID reduces risk of death or hospitalization by 89% in high-risk adults
The French CAC 40 was driven by a gain of 3% for the shares of luxury goods manufacturer Kering KER,
and 2.5% gain for its competitor LVMH Moët Hennessy Louis Vuitton MC,
The rest of the sector is also on the rise, with Hermès International RMS,
shares up 2%, Christian Dior CDI,
stock up to 2%.
Piral Dadhania, an analyst at RBC Capital, said luxury goods companies this week benefited from + 10% to 15% price hikes on two of Chanel’s iconic women’s handbags. The sector also performed well in the third quarter and through October, despite more difficult comparisons, COVID-related disruptions in China and a moderate economic environment, to name a few, the analyst said.
“The broader luxury sector should benefit from Chanel’s latest price increases as it creates some leeway in the coming months / quarters, although we don’t expect most brands to embrace one. such an aggressive approach, “said the analyst, who noted that Louis Vuitton hiked prices 6% in October for 1/3 of its SKU mix of handbags, a brand that benefited, according to the call. management’s third quarter results.
The banking sector was on the rise, led by HSBC HSBC,
HSBA,
which increased by more than 1%.
The travel industry also climbed, following the well-received results of International Consolidated Airlines IAG,
with these shares up 2.5%. The company reported positive operating cash flow for the first time since the start of the pandemic.
Gains spread across the entire sector, with the Carnival CUK cruise group,
CCL,
up 7%, TUI TUI group travel,
grew by more than 5%, while airlines Deutsche Lufthansa LHA,
gained 5% and Ryanair RYA,
3.5%.