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European luxury stocks tumble after weak Chinese data

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PARIS (Reuters) – Shares in top European luxury goods companies fell on Monday after weak economic data from China, which is a major source of revenue for many firms in the sector.

LVMH fell 2 percent, <LVMH.PA>, while Gucci-owner Kering <PRTP.PA> and Hermes <HRMS.PA> fell by more than 1 percent.

Italian luxury goods companies also lost ground, with Ferragamo <SFER.MI> falling 1 percent, while Moncler <MONC.MI> retreated by 2 percent.

Prada <1913.HK> shares also slumped around 5 percent in Hong Kong, although Burberry <BRBY.L> shares managed to swim against the tide by rising 1 percent after Bank of America Merrill Lynch upgraded its stock rating on the company to “neutral”.

Data on Monday showed China’s exports unexpectedly fell by their most in two years in December, while imports also contracted, pointing to further weakness in the world’s second-largest economy in 2019 and deteriorating global demand.

China also posted its biggest trade surplus with the United States on record in 2018, which could prompt President Donald Trump to turn up the heat on his Chinese counterpart Xi Jinping in their bitter trade dispute.

“Despite increased optimism after (the) Trump-Xi summit in Argentina, significant uncertainty remains as to whether there could be a deal after March 1,” wrote Citigroup economists in a note.

(Reporting by Sudip Kar-Gupta; Editing by Jason Neely and Mark Potter)

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