European shares subdued as luxury stocks, miners weigh
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European shares subdued as luxury stocks, miners weigh
06 mins
STOXX 600 logs fifth consecutive weekly gain despite Friday’s dip
Novo Nordisk jumps 6.5% on positive Wegovy launch, UK approval
Luxury stocks fall, Richemont down 5.4% after BofA downgrade
Jan 16 (Reuters) – European shares were subdued on Friday, limited by weakness in luxury and mining stocks in a dour end to a week dominated by the start to a busy earnings season alongside geopolitical jitters.
The pan-European STOXX 600 (.STOXX), opens new tab finished flat at 614.38 points, with the luxury index (.STXLUXP), opens new tab falling 3.2% and logging its biggest daily fall since early October.
Richemont (CFR.S), opens new tab was among the leading laggards, declining 5.4% after BofA global research cut its recommendation on the Swiss jewellery company to neutral from buy and told investors to wait, citing extended valuations after a recent rally.
“European equities aren’t cheap anymore, but they’re not expensive either. That said, the margin of safety that investors had previously is gone,” said Michael Field, chief European equity strategist at Morningstar.
Still, the STOXX 600 logged its fifth-consecutive weekly gain, its longest winning streak since May 2025.
The index has scaled multiple record highs, led by strength in commodity-linked stocks as prices of safe-haven precious metals and crude oil soared earlier in the week on simmering geopolitical tensions over Iran and Venezuela.
On Friday, those tensions appeared to abate, sending mining stocks (.SXPP), opens new tab down 1.9%.
“As you come to the end of the week (following) a pretty strong start to the year, maybe there’s just a little bit of a pause as people reflect there are some good fundamental reasons for optimism, but there’s a good amount of uncertainty in the world on the geopolitical side,” said Richard Flax, chief investment officer at Moneyfarm.
Danish drugmaker Novo Nordisk (NOVOb.CO), opens new tab jumped 6.5% after analysts said its weight-loss pill Wegovy made an “encouraging” start after its launch this month. The healthcare index (.SXDP), opens new tab also added 0.6%.
Britain’s health regulator approved a higher dose of Wegovy for obesity patients, while Berenberg also raised its price target on the stock.
The week had witnessed a mixed bag of earnings updates from the likes of Richemont, BP (BP.L), opens new tab and BE Semiconductor (BESI.AS), opens new tab. Fourth quarter earnings were expected to decrease 4.1% from a year ago, with consumer cyclicals the hardest hit, according to data compiled by LSEG.
Kongsberg Gruppen (KOG.OL), opens new tab shares jumped 9.5%, the best individual performer on Friday, after at least two brokerages lifted price targets on the Norwegian defence equipment maker.
Reporting by Niket Nishant, Avinash P and Johann M Cherian in Bengaluru; Editing by Mrigank Dhaniwala, Devika Syamnath and Alex Richardson
Niket Nishant reports on breaking news and the quarterly earnings of Wall Street’s largest banks, card companies, financial technology upstarts and asset managers. He also covers the biggest IPOs on U.S. exchanges, and late-stage venture capital funding alongside news and regulatory developments in the cryptocurrency industry. His writing appears on the finance, business, markets and future of money sections of the website. He did his post-graduation from the Indian Institute of Journalism and New Media (IIJNM) in Bengaluru.
