European fashion stocks soar following Iran ceasefire

Madrid – Optimism is taking hold of the markets following the hopeful bilateral ceasefire agreed between the governments of the US and Iran in the early hours of Wednesday, April 8, Central European Summer Time. The agreement, reached for the next two weeks, is based on open negotiations for a “definitive” and “long-term” peace deal. It will also guarantee “safe passage” through the Strait of Hormuz.

Given such an encouraging outlook, the markets have responded swiftly to the beginning of the end of a crisis. This crisis was already impacting consumer spending and affecting a wide range of companies across various sectors. The response has sent the share values of major European listed companies soaring. This revaluation of shares has been seen almost across the board throughout the day. For the IBEX 35 index, the only exception has been energy companies. Their share values are in the red, which can be attributed to the fall in oil and gas prices resulting from the “guarantees” for the opening of the Strait of Hormuz.

Within the fashion industry specifically, the performance has been diametrically opposed to the “Black Monday” on March 2. That day followed the attacks on Iran by the US and Israeli armies on February 28. Major European listed fashion companies are generally experiencing a very positive trading day. The market's optimism for the sector is proving much stronger than the fears expressed after that last Saturday in February. The current gains far exceed the losses recorded at that time. It should be noted that those losses were followed by several successive days of falling share values for major European listed fashion companies. The sector had been triply affected by this latest crisis in the Middle East. Firstly, by disruptions to its value chains, which led to delays in certain product deliveries. Secondly, by increased costs related to both imports and manufacturing processes caused by the same disruption. Thirdly, by a drop in consumption that was beginning to be felt among consumers, resulting from the uncertainties generated by the crisis.

European fashion is “dressed in green” on the stock market

With many of these uncertainties now somewhat dispelled, the stock market performance of major European listed fashion companies has been more than positive. This was evident at the opening of Wednesday's trading session. Following the confirmation of the two-week ceasefire between the US and Iran, based on negotiations for a long-term Peace Agreement and the opening of the Strait of Hormuz, the shares of major fashion companies soared. They recorded revaluations ranging from +2.71 to +8.22 percent.

At the two ends of this range, at the market open this morning, were the British group Burberry (+8.22 percent) at the top and the Swedish fashion multinational H&M Group (+2.71 percent) at the bottom. From there, the companies evolved differently. Burberry's shares lost some momentum, currently trading at 1,143 pence compared to Tuesday's close of 1,069.80 (+6.84 percent). H&M's shares gained strength, trading at 176.75 Swedish kronor compared to the last session's close of 171.25 (+3.21 percent).

As for other updates, shares of the French multinational holding company LVMH are currently trading at 500.70 euros (+7.25 percent); Kering's at 275 euros (+6.69 percent); and Hermès' at 1,781 euros (+8 percent). Regarding the two major Spanish listed companies, shares of Inditex, owner of Zara and other chains like Bershka, Stradivarius and Massimo Dutti, are currently trading at 53.18 euros (+5.97 percent). Puig, which is currently in negotiations for a potential merger with the US company The Estée Lauder Companies, has its shares trading at 17.70 euros per share (+3.14 percent).

This article was translated to English using an AI tool.

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