By Dhirendra Tripathi
Investing.com – Stocks of luxury retailers took a knock in Europe as the latest data showed a sudden and sharp slowdown in retail sales growth in China.
Gucci-owner Kering SA (PA:PRTP) and LVMH (PA:LVMH) traded 3.5% and 2.6% lower, respectively, in Paris. Moncler (MI:MONC) fell 3.2% in Milan while Richemont (SIX:CFR) was 3% down in Swiss trading. Burberry (LON:BRBY) fell 1.2% in London.
Retail sales in China grew a disappointing 2.5% in August from a year ago as the world’s second largest economy dealt with the worst Covid outbreak since it first emerged in Wuhan late 2019. This was well below Reuters’ poll forecasting a 7% growth amid emergence of fresh Covid cases indicating an extended period of pain for the retailers.
Local authorities in China imposed fresh restrictions and scaled up testing Wednesday as 50 more cases were diagnosed in various parts of Fujian province, most of them around the city of Putian. Nearby cities of Xiamen and Quanzhou also restricted travel.
The latest lockdowns came on the same day of reports for plans for tighter regulation of the gambling industry in Macau. Known as Asia’s Las Vegas, Macau is a beneficiary of gamblers splurging on luxury goods like watches, jewelry and bags.
According to a Bloomberg report Tuesday, local authorities want government representatives to supervise casino operators.