By Dhirendra Tripathi
Investing.com – Stocks of European retailers such as LVMH (PA:LVMH), Kering (PA:PRTP), H&M (ST:HMb), Moncler (MI:MONC) and Hermès (PA:HRMS) were all down around 4% Tuesday after the European Union banned exports of luxury goods to Russia.
The ban covers luxury goods worth more than 300 euros ($329.58) and cars costing over 50,000 euros, according to reports. It follows a similar move by the U.S. on Friday.
The new list is part of the fourth set of sanctions brought by the EU against Russia for its invasion of Ukraine. Previously sanctioned items include steel, iron ore, and electronic gadgets.
While Russia is a big market for many of the luxury goods makers, the fear is that China may also get dragged into the sanctions net.
China is one of the biggest makers of these luxury goods, and a key supplier of raw materials that go into making them. The world’s second-largest economy is also a big market for these items.
The bloc is also withdrawing Russia’s ‘most favored nation’ status and pushing for removing the country from the MFN list at the World Trade Organization as well.
The shares were also impacted by a fresh outbreak of Covid-19 in China which has seen several key cities in the country come under fresh lockdowns. These include the economically important regions of Guangdong, Shanghai, Shandong, and Jilin.