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* LVMH rises after strong sales
* Other luxury good stocks also outperform
* STOXX 600 index down around 7 pct so far in 2016
By Sudip Kar-Gupta
LONDON, Oct 11 European stock markets were
steady on Tuesday as gains in the shares of major luxury goods
companies, after strong figures from LVMH, offset the
impact of weaker bank stocks.
The pan-European STOXX 600 index was flat and still
down by around 7 percent since the start of 2016.
Berkeley Futures' associate director Richard Griffiths said
he still had concerns about the generally weak economic backdrop
facing Europe, with Britain's decision to quit the European
Union adding another layer of uncertainty.
"I'm not an enthusiastic buyer of the markets here. I see
more downside than upside," said Griffiths.
However, LVMH outperformed to rise 5.4 percent after the
company reported a forecast-beating acceleration in
Rival luxury good stocks such as Christian Dior,
Richemont and Burberry also advanced to feature
among Europe's best-performing stocks.
However, the STOXX Europe 600 banks index fell 0.4
percent, bringing its losses for the year to around 22 percent
-- the worst-performing sector in Europe.
The European Central Bank's move to cut interest rates to
record lows, with rates now in negative territory, has kept
stock markets afloat since those rates have hit returns on bonds
and cash, making the returns available from stocks appear more
attractive by comparison.
However, negative interest rates also hit the profits of
European banks, since they make less money from their lending
activities in a negative rate environment.
"We remain cautious on the outlook for European bank
profitability," UBS analysts said in a research note.
(Editing by Keith Weir)