FRANKFURT: Europe’s main stock index closed lower on Friday, as investors paused following four successive sessions of gains, while luxury stocks advanced after robust earnings from Birkin bag maker Hermes.
The pan-European STOXX 600 index settled down by 0.3%, after closing the previous four sessions at record high levels.
Still, the benchmark index logged gains for its eighth-straight week - its longest streak of weekly gains since the first quarter of 2024. On an annual basis, the STOXX is up over 8%, outperforming its Wall Street peers, as investors cheered better-than-expected European companies’ earnings.
Goldman Sachs raised its 12-month price forecast for STOXX 600 index, citing factors such as a lower risk premium, reduced energy prices, improved consumer confidence, and stronger economic growth as the key drivers.
The luxury goods index was among top sectoral gainers, up 0.4%. French luxury group Hermes rose 0.8% after reporting an 18% rise in fourth-quarter sales, showing robust appetite from wealthy shoppers for expensive luxury items.
Other luxury goods companies also rose such as LVMH , was up 0.8%, and Kering, which added 1.7%, as investors priced-in a potential increase in demand from China after data showed bank lending in January in the country hit a record high.
Meanwhile, investors were heading into the weekend with little clarity on U.S tariffs.
US President Donald Trump did not immediately impose reciprocal tariffs on Thursday. But he kicked off investigations into levies imposed on US goods by other trading partners that could help issue appropriate duties.
The European Commission said it would react “firmly and immediately” to any tariffs.
“In terms of retaliation, (the EU) is in a very difficult position because of the fact that they’re very exposed to automobiles and luxury goods in their indices,” said Lale Akoner, lead global market analyst at eToro.
“If I have to pick two sectors (that are relatively insulated from tariff threats), I would say financials, especially banks and industrials that have exposures to electronics and semiconductors.”
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