Reuters
- European stocks took a hit as China's stock rally lost momentum.
- A lack of new stimulus details from China has affected the luxury sector.
- Shares in LVMH and Kering were down Tuesday.
European stocks took a hit on Tuesday as China's stock rally cooled following a lack of much-awaited details about how the government plans to support economic growth in the country.
Investors were expecting the National Development and Reform Commission, China's top economic planner, to provide fresh information regarding stimulus plans at a press conference on Tuesday. But this didn't happen, hitting sectors reliant on China, including mining and luxury.
Shares in LVMH, which owns Louis Vuitton and Christian Dior, were down about 4%, and Kering, which owns Gucci and Balenciaga, was down around 6% early Tuesday ET.
Meanwhile, British luxury fashion house Burberry fell nearly 6%.
Chinese stock markets were initially strong, with shares rising by over 10% after the country's Golden Week holiday ended on Monday.
However, investors hopeful to discover how officials planned to stimulate China's economy were left disappointed.
Luxury brands have seen sales suffer in China in recent months amid the country's economic slowdown.
LVMH reported a 14% drop in sales in the Asia region, excluding Japan, in the most recent quarter. Kering also reported a "deceleration" in Asia-Pacific in its latest earnings.
In its most recent update, Burberry's revenue in China fell 21% from last year.
Some brands, such as Marc Jacobs, Burberry, and Balenciaga, have responded to the slump by offering sales and discounts to reel in reluctant Chinese consumers.
Luxury fashion houses eager to see a rise in demand from economic recovery instead have faced another blow.
LVMH, Kering, and Burberry did not respond to a request for comment.