Luxury stocks rally globally amid signs of recovery in demand

Luxury stocks have surged worldwide after Richemont, which owns Cartier, posted soaring sales, as investors bet on a recovery for the sector.

The FTSE 100 gained 91 points on Thursday to finish the day at 8,392, or a 1.1% rise.

Watches of Switzerland’s share price rose 8% and Burberry’s rose 4% after Richemont surprised experts by posting a one-tenth increase in sales in its jewellery business over the Christmas season.

The luxury sector has endured a two-year slowdown, with fashion, jewellery and other high-end retailers suffering falling sales amid stagnant demand from consumers.

Russ Mould, an analyst at the investment firm AJ Bell, said investors “took Richemont’s update as a signal that the luxury goods sector’s slump was over”.

“Investors were previously caught off guard when they presumed the cost-of-living crisis would not impact wealthy people and therefore the luxury goods sector would continue to thrive, but this turned out to be incorrect.

“Luxury goods companies saw a drop in demand and share prices were shaken across the sector.”

In Europe, France’s Cac 40 closed 2.1% higher, and in Frankfurt the Dax was up 0.3%.

On Wall Street, the S&P 500 and Dow Jones were roughly flat by the time European markets closed.

The pound was flat against the US dollar at 1.224 on Thursday.

Sterling was down about 0.1% against the euro at 1.188.

In company news, Deliveroo said it enjoyed more orders and spending in recent months despite ongoing weaker consumer confidence in the UK.

The boss of the delivery firm said it had been growing the selection of products available on the platform to “bring even more of the neighbourhood to consumers’ doors”.

For the UK and Ireland, the number of orders grew by 5% to 43.1 million over the last three months of the year, compared with the same period last year.

In oil markets, the price of Brent crude oil fell by 1.88%, to about 80 US dollars per barrel.

The biggest risers on the FTSE 100 were Rightmove, up 27p to 654p, Spirax, up 280p to 6925p, Experian, up 128p to 3646p, Games Workshop, up 380p to 13180p, and Weir Group, up 62p to 2282p.

The biggest fallers on the FTSE 100 were JD Sports, down 5.52p to 87.36p, Taylor Wimpey, down 3.3p to 111.05p, Whitbread, down 71p to 2901p, easyJet, down 8.7p to 497.5p, and Pershing Square, down 62p to 4202p.