Luxury: European shares rise on speculation that the Strait of Hormuz may reopen

The possible thaw in relations between the United States and Iran, with the possibility of a reopening of the Strait of Hormuz and an easing of oil sanctions, suddenly brings geopolitics back to the forefront of market dynamics and triggers a rapid repricing of assets most sensitive to the global consumption cycle. Against this backdrop, the European luxury sector accelerated decisively during the trading session, interpreting the scenario as a potential easing of macro risks and an improvement in the outlook for international demand.

The luxury sector remains one of the main beneficiaries of the risk-on sentiment, at a time when investors are interpreting share prices as signalling a potential reduction in geopolitical risk in the Middle East – a region that influences both energy dynamics and global consumer confidence.

In this context, halfway through the trading session on the Paris stock exchange, LVMH is up by around 5%, whilst Kering is up by 5.9% and Hermès by 5%. Also in the spotlight in London is Burberry, up 4%. Among European premium stocks, Moncler (+1.8%) and Brunello Cucinelli (+1.5%), whilst in Frankfurt Hugo Boss is up 0.8%. The latter had seen a stock market rally on 11 June, driven by the takeover bid worth almost €2 billion launched by the British group Frasers, moving above the takeover price. Frasers, which is already the largest shareholder in Hugo Boss with a stake of around 26%, announced on Wednesday after the close of trading its decision to launch a cash takeover bid of €38 per share for the 74% of shares it does not control, representing a 4.3% premium over the closing price, for a total amount of €1.978 billion.

Looking at the current situation, the sector has been among those most exposed to tensions in the Middle East in recent weeks, with impacts not only directly on regional demand – which accounts for a mid-single-digit share for many fashion houses – but also indirectly through reduced tourist flows and the deterioration of the ‘feel-good factor’, a key driver of discretionary spending.

The outlook is positive for LVMH’s second quarter of 2026, with the group set to publish its results at the end of July 2026. The market expects organic growth to accelerate following the +1% recorded in the first quarter, and according to a report published today by Barclays, the group is expected to report a +2.6% increase in sales on an organic basis, in line with the Bloomberg consensus, driven primarily by the contribution of the Watches & Jewellery and Selective Retailing segments, whilst Fashion & Leather Goods (FLG) remains weaker and below expectations.