LVMH led luxury stocks higher in Europe on Thursday as China lifted a ban on group tours, boosting the case for travelers spending money on high-end watches and fashion.
The maker of Louis Vuitton bags rose as much as 2.6% in Paris, Hermes International gained 2.4% and L’Oreal SA advanced 1.8%, adding about €20 billion ($22 billion) in combined market value. Rolex retailer Watches of Switzerland Group Plc climbed as much as 5.9% after maintaining earnings guidance in a trading update.
China lifted a group travel ban to countries including the US, UK, Australia, South Korea and Japan. Buyers from the country account for about 25% of European luxury-goods sales, including purchases made by tourists, according to latest estimates from Goldman Sachs Group Inc.
Read More: China Allows Group Tours to US, UK in Test for Travel Demand
Group tours to Switzerland, Italy, Spain, France, Greece, Denmark, Iceland, Portugal had already been approved earlier this year.
After a solid start to the year luxury stocks have drifted lower in recent months on weak Chinese consumer and economic data. Bullish investors are pinning their hopes on a revival in anticipation that Beijing will soon implement more decisive stimulus measures to kick-start its flagging economy.
The relaxation, a significant boost to the global tourism market, also sent Europe’s travel and leisure subindex 1% higher, with Air-France KLM rising 2% and TUI AG gaining 1.5%.
--With assistance from Michael Msika.
