Head winds from China, for our luxury titans. While the Middle Empire shows a slowdown in its economic growth and Beijing has evoked a redistribution of wealth, the tricolor giants of the sector show very marked drops in prices. Shortly before 12:00 GMT, LVMH lost 5.54% to 618.70 euros, Kering fell 8.11% to 659.80 euros and Hermès 3.75% to 1,232 euros, weighing down the CAC 40 because of their disproportionate weight. “Concerns about a potential slowdown in China have increased in recent days” and “investors will assess what impact this could have on the European luxury sector”, according to a note from UBS which recalls that the chinese consumption accounted for 35% of luxury product sales in 2019 and 28% in 2020, the year the industry was affected by the Covid-19 pandemic.
Among the factors fueling these fears, UBS cites “the resumption of restrictions linked to Covid”, “the potential macroeconomic slowdown” and “recent concerns related to the government’s call for income redistribution and adjustment. the highest “. According to Chinese media reports, Chinese President Xi Jinping on Wednesday stressed at a meeting devoted to the economy that measures should be taken to “adjust excessive incomes” and “increase the incomes of low-income groups”, for the sake of social equity.
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