Europe Markets: Luxury goods makers lead gains in Europe after LVMH announces Tiffany deal

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European stock markets traded higher on Monday amid perceived positive steps on U.S.-China trade negotiations, and with deal news boosting the luxury goods sector after LVMH Moët Hennessy — Louis Vuitton said it would acquire Tiffany & Co.

The Stoxx Europe 600 SXXP, +0.71%  rose 0.7% to 407.40, after gaining 0.4% on Friday, but breaking a six-week winning streak with a weekly loss of 0.5%.

The German DAX DAX, +0.42% rose 0.4% to 13215.82, the French CAC 40 PX1, +0.48% gained 0.5% to 5921.98, and the U.K. FTSE 100 UKX, +0.69%  was up 0.6% to 7370.45.

U.S. stock futures rose after equities closed higher on Friday, though major indexes halted a string of multi-week gains. Investors stayed focused on trade issues in a holiday-shortened week; U.S. markets will close on Thursday for Thanksgiving Day.

In what could be an important step forward for trade, Beijing said on Sunday that it will increase penalties for intellectual property violations, a topic that has been a key sticking point for trade negotiations with the U.S. Investors were also eyeing a tweet from the Global Times — run by China’s ruling Communist Party — that said Beijing and Washington are “very close” to an initial trade deal.

Europe was also playing catch-up after President Donald Trump said on Friday that there was a “good chance to make a deal.”

The positive vibes on trade fed through to auto stocks, with Daimler DAI, +1.63%  up 1.2% and Volvo VOLV.B, +1.36% rising 1.6%. Miners also rose, with Rio Tinto RIO, +1.31% RIO, +0.94%  up 1.2% and Glencore GLEN, +0.91%  up 1.3%.

Meanwhile, the clothing and footwear sector was doing the heavy lifting for Europe, after LVMH MC, +2.17%  announced a $16.2 billion deal for Tiffany TIF, -0.78%, ending weeks of speculation. Shares of LVMH climbed 1.8%.

That news triggered gains across the luxury goods sector, with LVMH rival Compagnie Financière Richemont CFR, +1.96%  up 1%, while shares of Swatch Group UHR, +2.40%, Christian Dior CDI, +2.13%  and Burberry Group BRBY, +2.80% rose 1.4%.

Shares in Novartis NVS, -0.06% NOVN, +0.49%  slipped 0.3% after news the Swiss pharmaceutical group has reached a $9.7 billion deal for U.S.-based The Medicines Company MDCO, -1.73%. Novartis will pay $85 per share for the New Jersey-based biotech.

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