European Stocks Trim Quarterly Decline as Luxury Sector Rallies

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Signs of cooling inflation and a rally in luxury shares boosted European stocks on Friday, helping them trim a quarterly decline.

Luxury stocks were among the top performers after Bank of America Corp. strategists raised their view on the sector to overweight, while technology stocks followed US peers higher and real estate rebounded from six days of losses. The Stoxx Europe 600 Index was 0.4% higher by the close. Energy and insurance stocks underperformed.

The retail sector got a boost from Nike Inc. results, which showed a drop in its stockpile of inventory — a sign the sportswear giant is making progress in moving out older merchandise for newer, more-profitable items. Adidas AG and Puma SE were among the top risers in the region. The main regional benchmark notched its first quarterly drop since September 2022 as sentiment has soured due to fears about the impact of higher-for-longer interest rates on economic growth, as well as concerns over the property crisis in China. The Stoxx 600 Index is now about 6% higher this year.

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