According to Investing.com, Hermes, Kering, LVMY, Richemont, Moncler and Burberry added between 1.7% and 3.1% for the second day in a row. Swatch Group shares jumped more than 7%, which could be the company’s best one-day gain since January.
The market reacted to signs of possible de-escalation in the region. This is especially important for luxury goods manufacturers: the sector is directly dependent on international tourism and spending by wealthy clients, including those from the Gulf.
Conflict in the Middle East has been weighing on the industry since April. Tensions over the Strait of Hormuz have hit tourist flows and heightened fears for the global economy. At the same time, high energy prices curbed consumer spending in Europe and Asia.
The luxury sector was already going through a difficult period due to weak demand in China and cautious European buyers. Now, hopes for peace have given investors a reason to once again buy shares of companies that had been lagging behind the European market in recent months.
