Burberry hit as investors check out of luxury goods

Luxury goods are having a shabby time on the stock market.

Some of Europe’s biggest names in fashion – including the uK’s Burberry and Mulberry – sank after investment bank Morgan Stanley released a damning report on the sector.

LVMH, the heavyweight owner of brands such as Louis Vuitton and Christian Dior, reported stronger-than-expected sales in its fashion and leather goods divisions late on Tuesday.

But a warning from the firm over what it described as an ‘uncertain geopolitical and monetary context’ put investors in flight.

LVMH and other renowned fashion houses have increasingly relied on big-spending Chinese consumers to boost their figures.

But the trade war between Donald Trump and the Chinese has thrown doubt on whether demand in the country will last.

Morgan Stanley downgraded the luxury sector to ‘underweight’, advising investors to decrease the proportion of shares in luxury fashion companies that they own in their portfolio. Burberry shares slumped by 8.1pc, or 152p, to 1728p, while handbag maker Mulberry fell 5.2pc, or 16p, to 289.5p. On the continent, £9bn was wiped off titan LVMH as it plummeted 7.1pc. Gucci owner Kering and high-end skiwear company

Moncler plunged by 9.6pc and 10.9pc respectively. London-focused housebuilder

Telford Homes might have been wishing it hadn’t brought up Brexit, as its shares tumbled after it issued a trading update.

Though the firm said it had just 90 homes left to sell by March in order to achieve profits of £50m, it warned that plans for Britain to leave the Eu were pushing down London property prices. recent ‘negative commentary around the outcome of Brexit’ was adding to a ‘more general downturn in the market for expensive prime homes in London’, Telford said.

Though the company focuses on more ‘affordable’ properties with an average price of £540,000, which it believes will continue to be in demand, shares still flopped 7pc, or 27.5p, to 366.5p.

Telford’s pessimism infected the uK’s other housebuilders, as nearly all ended the day with their share price in the red.

The FTSE 100 slid 1.3pc, or 91.9 points, to 7145.74 as Burberry pushed the index lower. Packaging giants Mondi, DS Smith and Smurfit Kappa also weighed heavily, after four industry competitors joined forces to create a new sustainable company.

Bway, Mauser Group, National Container Group and Industrial Container Services have merged to create a new threat to the FTSE players. Mondi fell 8.7pc, or 170p, to 1775.5p, DS Smith dropped 6.5pc, or 29p, to 418.2p and Smurfit Kappa tumbled 5.7pc, or 156p, to 2580p. Newly listed online lender Funding Circle, whose shares had slumped after it floated last week, finally began picking up after it emerged that fund managers Invesco and Merian took sizeable stakes in the business.

Shares climbed by 9.9pc, or 34.7p, to 384.7p, though this was still a way off the original listing price of 440p. Aston Martin, which floated on the same day, is still miles below its debut price of 1900p even after climbing 1pc, or 16p, yesterday to 1610p. Mining company Vast

Resources shot up 10.3pc, or 0.06p, to 0.64p as it was granted approval from romania’s government to open the Baita Plai metals mine. It is the first time such a licence has been granted in romania for 19 years.

Vast’s 80pc stake in the mine is thought to be worth £37.6m, and currently the company itself is only trading at a value of £35m.