Written by Pranav Kashyap
(Reuters) – European stocks retreated from record highs reached earlier on Friday, as caution prevailed ahead of important US data, although gains in Moncler and luxury goods stocks limited further declines in prices.
The European index settled at 526.32 points. The benchmark index hit an all-time high of 526.72 points earlier in the session and is expected to record its best week in more than a month if gains continue.
Investors may be wondering if there is enough momentum to rally after touching those record levels, said Daniella Hathorne, senior market analyst at Capital.com.
“We may see a little bit of consolidation from here.”
Overall gains were muted by investor caution as markets awaited the US core personal consumption expenditures price index – the Federal Reserve’s preferred measure of inflation – due later in the day.
Italian Moncler shares rose 11.8% after CEO Ruffini struck a deal with LVMH, which will see the retailer partner with Ruffini to make an expanded investment in the luxury group.
The personal and household goods sector in the region supported the index with a jump of 1.6%.
News of Chinese stimulus significantly boosted the benchmark STOXX 600 index this week, underscoring the crucial role of Chinese consumers for European companies.
Earlier in the day, China’s central bank lowered the borrowing cost for reverse repurchase agreements for seven days, as part of the largest stimulus package since the pandemic. (MKTS/Globe)
China-focused luxury goods stocks rose, with shares of LVMH and Hermes. dry (EPA:), Hugo Boss and Burberry posted gains of between 2% and 4%.
Gains in auto stocks provided support, as European luxury automakers with significant exposure to the Chinese market tend to benefit from higher consumer spending due to the stimulus.
“China has been pushed to second base… and this (rise) puts into perspective how important Chinese consumers are to Europe,” Hathorne said.
Chinese stocks are heading for their best week since 2008. (.SS)
French consumer prices rose less than expected in September, according to CPI figures. It rose by 0.1%.
Spain was trading flat after data indicated a decline in inflation in the country to 1.7%.
German unemployment rates rose more than expected in September, according to data. However, the index traded 0.2% higher at 19,292.20.
Investors are also awaiting Eurozone consumer confidence figures, which are due to be released at 0900 GMT. ECB Chief Economist Philip Lane will speak on fiscal policy at 0815 GMT.