By Pranav Kashyap and Shashwat Chauhan
(Reuters) -Europe’s stock index closed at a record high on Friday as companies and sectors exposed to China continued to recover after Beijing unveiled a raft of stimulus measures this week, with luxury companies among the biggest winners.
The pan-European STOXX 600 closed 0.5% higher at 528.08, bringing gains for the week to more than 2%.
China-exposed sectors such as carmakers and chemicals were among the biggest gainers, each up more than 2%, reflecting the country’s importance to European companies.
China’s central bank cut interest rates and injected liquidity into the banking system, while Beijing staged a last-ditch stimulus push to return economic growth to its target of roughly 5% this year.
“(China) has sent a clear signal that stimulus measures will be stepped up across the board and that the recovery of the economy is now the number one priority,” Danske Bank analysts said.
“It is the largest round of stimulus since the current crisis began three years ago and could well be China’s ‘whatever-it-takes’ moment.”
Luxury companies LVMH and Richemont rose 3.7% and 2.7% respectively.
A benchmark of 10 of Europe’s largest luxury companies added 2.6%, pushing weekly gains above 13%, the most since the index was created in 2016.
Moncler also rose 10.9% after French rival LVMH took a small stake in the Italian outerwear specialist.
Inflation fell more than expected this month in two of the eurozone’s largest economies, France and Spain, and the German job market continued to cool, adding to an already substantial case for the European Central Bank (ECB) to resume next month cut back on financing costs. .
Major brokers, including Goldman Sachs and JPMorgan, now expect the ECB to implement a quarter-point cut at its October 17 meeting.
Yields on eurozone government bonds, which move opposite to prices, fell on Friday. [GVD/EUR]
Among other stocks, index heavyweight Novo Nordisk (NYSE:) fell 4.6%, with two analysts pointing to JPMorgan’s third-quarter outlook, which forecast the Danish drugmaker’s results would fall short of consensus.
Britain’s Cranswick rose 6.7% after the meat producer forecast its annual profit at the high end of market expectations.
