Europe midday: LVMH lifts luxury stocks across the continent

(Sharecast News) - Strong corporate results and easing political uncertainty in France helped power European stock markets higher on Wednesday, though equities in London were firmly in the red.

The Stoxx 600 was up 0.6% at 568.16, with the CAC 40 leading the way with a 2.4% surge on the back of strong gains in luxury sector.

Meanwhile, news that re-appointed French prime minister S�bastien Lecornu is planning to put off a highly contentious pension reform until 2027 eased investor concerns on hopes that he will now have enough support to get an amended draft budget bill passed in parliament.

The controversial reforms, that would see the pension age rise from 62 to 64, are one of president Emmanuel Macron's main economic policies but had divided French politicians over recent years, and led to weeks of public protests in 2023. Lecornu is planning to suspend the reforms until after the 2027 presidential election.

"By suspending pension reform, he may have secured Socialist support, but he now risks losing votes from centre-right Horizons or Republican MPs who don't toe the party line. In France's fractured legislature, winning votes on one side leads to losses on the other side," said analysts at Rabobank in an email.

In economic data, eurozone industrial production fell 1.2% in August, erasing a revised 0.5% increase in July, according to Eurostat. But that wasn't as bad as the 1.6% decline expected by analysts. Meanwhile, Spanish inflation rose to 3.0% in September - tied for its second-highest reading in 15 months - from 2.7% in August and higher than the flash estimate of 2.9% released two weeks ago.

In commodity markets, gold prices rose to a fresh peak of $4,200 an ounce on the back of ongoing safe-haven demand and increased expectations of further interest-rate cuts in the US, following comments from Federal Reserve chair Jerome Powell the previous evening.

"Gold has pushed to yet another record high as the prolonged US government shutdown continues to dent confidence in the world's largest economy," said Joshua Mahony, chief market analyst at Scope Markets. "The recent US-China tensions serve as a reminder of why diversification into hard assets has become a structural theme for many."

Meanwhile, oil prices were extending losses, with Brent crude down a further 0.2% at $62.31 a barrel - its lowest level since May - amid oversupply concerns and rising trade tensions between the US and China.

LVMH lifts luxury sector

Shares in France's LVMH surged 14% on Wednesday after the luxury powerhouse returned to growth following a difficult first half. Updating on trading, the owner of Moet Hennessy, Louis Vuitton, Christian Dior and Tiffany & Co, among others, posted an unexpected 1% uptick in organic growth during the third quarter, to �18.3bn.

Christian Dior also rose 14% while Moncler and Swatch gained 9%, with strong gains also registered by Burberry, Hermes and Kering.

ASML jumped 4% after the Dutch chipmaking supplier reported a doubling of orders in the third quarter, with investors seemingly shrugging off comments about an expected decline in sales from China. The company reported net bookings of �5.40bn over the three months to 30 September, up from �2.63bn reported a year earlier and ahead of the �5.36bn expected, as the AI spending boom continued.

Meanwhile, London's FTSE 100 was trading 0.6% lower as defence giants Babcock and BAE extended losses following the Israel-Hamas ceasefire. Weakness in the pharma and tobacco sectors also dampened the index, with losses by AstraZeneca, GSK, Imperial and BATS.