Iranian state media said on Friday that luxury stocks soared after a proposed deal between Iran and the United States included reopening the Strait of Hormuz and lifting U.S. oil sanctions.
shares of LVMHowner of Gucci keringand hermes It was up about 5%. swiss group Richemont rose about 3.4%, but across Europe Stocks 600 The index rose 1.8%.
Luxury stocks in general have been hit hard by the Iran war, but the Middle East has been a booming market for a sector that has otherwise been largely depressed. The war erupted in late February, when the industry was beginning to show signs of recovery after years of stagnation, driven by soft demand from Chinese consumers, once one of the industry’s main growth drivers.
The war has weighed on sales for many luxury brands, even though the region accounts for a mid-single-digit percentage of total sales on average.
Analysts say the risks to revenues lie not only in a slowdown in activity in the region itself, but also in reduced tourist flows and a hit to the so-called “comfort factor” as consumers cut back on discretionary spending amid a bleak economic outlook.
In April, LVMH reported a 1% negative impact from the Iran war in the previous quarter, halving organic growth for the quarter as the conflict overshadowed underlying improvements.
The following week, CEO Bernard Arnault warned of a “global catastrophe” if the Middle East conflict was not resolved, saying it could have a serious negative impact on the global economy.
Amid the Iran war, high-end stocks fell.
The interim peace agreement between the United States and Iran includes Iran’s commitment to reopen the Strait of Hormuz. The virtual closure of this narrow waterway, which normally carries about one-fifth of the world’s oil supplies, has had an impact on the global economy, with soaring energy prices and higher inflation.
The 14-point memorandum is subject to final decision.
President Donald Trump said in a social media post Thursday that the United States had “excellently resolved the war,” but warned that it required “finalizing the document.”
