European luxury shares fall after China stimulus briefing disappoints analysts By Investing.com

Investing.com — Shares of European luxury groups sank mid-morning on Tuesday after analysts were disappointed that Chinese officials did not announce a raft of new fiscal stimulus measures.

In a news conference, the chairman of China’s National Development and Reform Commission — the country’s state economic planner — said officials have “full confidence” that the world’s second-largest economy will meet its growth target of about 5% this year.

But the NDRC has not unveiled new fiscal stimulus plans to go along with a raft of supportive policies unveiled last month, leaving investors reeling.

The tepid reaction was felt in Chinese stocks, capping big gains after markets reopened following the Golden Week holiday.

Luxury stocks in Europe — including LVMH (EPA: ), owner of Louis Vuitton, parent of Gucci Kering (EPA:), British fashion house Burberry (LON:) and leather goods specialist Hermès (EPA:) — fell.

High-end manufacturers are exposed to changes in China’s economic outlook, as the country accounts for a large portion of their business. Analysts at Bain estimated that Chinese luxury consumption would eventually reach 35%-40% of the global total, Reuters reported.

European stocks in other sectors exposed to China, such as mining and autos, also fell.

In September, Chinese officials unveiled a sweeping package of new policies, including a sweeping cut in interest rates and a reduction in existing mortgage costs.

Meanwhile, the People’s Bank of China announced a swap program with an initial size of 500 billion yuan, designed to give funds, insurers and brokers easier access to the financing needed to buy stocks. The PBOC also said it would provide commercial banks with cheap loans of up to 300 billion yuan in a bid to help them finance share buybacks and buybacks by listed companies.

Chinese stocks rose after the announcement. On September 30, the last day of trading before the October 1 to October 7 holiday, the country’s stocks rose to their biggest one-day gain in 16 years.

(Reuters contributed reporting.)