European tech, luxury stocks tumble as ASML, LVMH results disappoint (updated)

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16/10/2024 10:29

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        * 
      France's CAC 40 underperforms peers on luxury drag
    

        * 
      Adidas drops amid broader selloff despite third 2024
outlook
    

        * 
      Spain's IBEX closes at highest since January 2010
    

        * 
      ECB's interest rate decision due on Thursday
    

  
 (Updated at 1600 GMT)
    By Paolo Laudani, Ankika Biswas and Johann M  Cherian
       Oct 16 (Reuters) - 
    Europe's STOXX 600 settled lower on Wednesday, with tech and
luxury stocks hurt by disappointing results from industry
heavyweights ASML and LVMH, while caution prevailed ahead of the
European Central Bank's policy decision.
  
    The continent-wide STOXX 600 index  .STOXX  fell 0.2%,
retreating further from the over two-week high hit early on
Tuesday. The euro zone blue chip index  STOXX50E  closed at more
than a three-week low.
    ASML  ASML.AS , the world's biggest chipmaking equipment
manufacturer, shed another 5.1% to hit a 10-month low, dragging
the tech index  .SX8P  down 1.5% to a one-month low. Its weak
2025 sales forecast on Tuesday sparked its steepest one-day
decline in nearly three decades.
    Jochen Stanzl, chief market analyst at CMC Markets, said
ASML's disappointing results might be due to cost cuts by its
customers such as Intel  INTC.O  and that in a few months, fresh
orders could lift the stock.
    The luxury sector also faltered as France's LVMH  LVMH.PA 
dropped 3.7%, the stock's biggest one-day drop in over one
month, after the company reported weaker third-quarter sales.
The French CAC 40 index  .FCHI  underperformed most major
European bourses with a 0.4% decline.
   Peers Gucci-owner Kering  PRTP.PA , Hermes  HRMS.PA  and
Richemont  CFR.S  fell between 0.8% and 1.3%. The broader luxury
 .STXLUXP  and personal and household goods  .SXQP  indexes each
shed over 1.3%.
    Both indexes have underperformed STOXX 600 so far this year.
China-exposed firms have grappled with dwindling sales in the
world's second-biggest economy, with sentiment getting a brief
boost from the latest stimulus measures.
        
  
        Shoemaker Adidas  ADSGn.DE  fell 6.3% despite raising
its full-year sales and profit guidance.
    Spain's benchmark  .IBEX  closed at its highest since
January 2010, but Germany's DAX  .GDAXI  index retreated further
by 0.1% from Tuesday's record high.
        "The probability for (the DAX) to continue going up is
higher because given the fact that there are a lot of export
oriented companies in the DAX comparable to global U.S.
companies," Stanzl said.
  
    Market participants expect the ECB to cut rates by another
25 basis points on Thursday, which could boost stocks.
    Travel and leisure stocks  .SXTO  rose 1.6% to top sectoral
charts, boosted by Whitbread's  WTB.L  6% gain after the Premier
Inn owner said bookings were picking up for the holiday season. 
    Among others, Just Eat Takeaway  TKWY.AS  lost 8.8% after
the food delivery company missed expectations for third-quarter
gross transaction value.
        Tecan  TECN.S  dropped 14.5% to the bottom of the STOXX
index after the Swiss life science equipment maker cut its 
    annual outlook.
    Teleperformance  TEPRF.PA  topped the STOXX index with a
11.2% rise after Kepler Cheuvreux upgraded the office services
and call centre company's stock to "buy" from "hold." 

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European luxury underperforms broader stocks    https://reut.rs/3YbECLp
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 (Reporting by Paolo Laudani in Gdansk, Ankika Biswas and Johann
M Cherian in Bengaluru; Editing by Savio D'Souza, Eileen Soreng
and Richard Chang)
 ((ankika.biswas@thomsonreuters.com,
paolo.laudani@thomsonreuters.com))