By Shashwat Chauhan
(Reuters) – European shares advanced on Thursday, as heavyweight luxury stocks got a boost following Richemont (SIX:CFR)’s upbeat earnings update and semiconductor firms gained after Taiwan Semiconductor Manufacturing Co (TSMC) reported a record quarterly profit.
The pan-European STOXX 600 had risen 0.5% as of 0910 GMT, to its highest since mid-December, while Germany’s DAX rose 0.1%, briefly hitting an all-time high.
Richemont surged 16.7% after the owner of the Cartier jewellery brand beat market expectations for quarterly sales, a positive sign for the high-end luxury sector over the all-important holiday season.
Deutsche Bank (ETR:DBKGn) said the results will “add to the debate that the more premium luxury brands are likely to outperform, the luxury slowdown is more cyclical than structural (at least at the high-end) and that there is enough growth in the rest of the world to offset China weakness.”
Rival LVMH jumped 7.8%, while a gauge of European luxury firms advanced 6.8%, set for its best day since 2022.
The tech index, which houses the bulk of European chipmakers, advanced 1.4% after TSMC , the world’s largest contract chipmaker, logged a record quarterly profit and said it expects hefty first-quarter revenue growth.
The STOXX’s gain on the day added to a jump on Wednesday, its biggest single-day gain in four months, after an easing core U.S. inflation reading kept potential rate cuts by the Federal Reserve on the table.
“(Inflation) is still quite volatile, you don’t want to make too much of a single data point. But it gave people some comfort that inflation was not necessarily going to re-accelerate just yet,” said Richard Flax, chief investment officer at Moneyfarm.
Global markets have been on edge lately about the implications of U.S. President-elect Donald Trump’s proposed policies, including trade tariffs, and as a strong batch of U.S. data recently kindled fears of fewer Fed rate cuts.
Now, after the inflation data, a retail sales reading, due 1330 GMT, is in focus.
Among other notable stocks, Zalando jumped 15.6% after Europe’s biggest online retailer said it expected profit in 2024 to beat its own forecasts.
Orion added 5.1% after the Finnish drugmaker hiked its 2024 revenue and operating profit outlook.
Airbus rose 1.1% after Morgan Stanley (NYSE:MS) named the airplane maker its top pick among aerospace companies.
