Shares in French luxury goods companies fall after HSBC downgrades

The company logo is seen during painting works in front of a shop of French luxury fashion brand Hermes in Zurich, Switzerland April 29, 2021. REUTERS/Arnd Wiegmann/Files

PARIS (Reuters) - Shares in major French luxury goods companies Kering and Hermes fell on Wednesday after HSBC downgraded its ratings on stocks in the sector.

Kering and Hermes were down by around 1% by 0705 GMT.

HSBC cut its ratings on Kering, Richemont and Burberry to “hold” from “buy”, while it also downgraded Hermes to “reduce” from “hold”.

“We expect the luxury sector to report exceptionally strong top-line growth for Q2 and expanded margins for H1, but the market might take a break as it really could be as good as it gets,” wrote HSBC in a note.

Reporting by Sudip Kar-Gupta; editing by Jason Neely