Shares of several high-end retail goods companies slumped Thursday in the U.S. and Europe on worries a worsening global economic climate could weaken Chinese appetite for premium branded products.
The tumble came amid growing fears of a hard economic landing in China, which has emerged as a key driver of the world’s economy in the wake of the global financial crisis.
The concerns circle around the possibility that China could face a sharp slowdown in exports in coming months, aggravating the headwinds facing the Asian country and dampening the nation’s demand for premium brands such as Louis Vuitton and Tiffany.
“Fears of a hard landing in China have once again intensified. While our base case remains a soft landing led mainly by an investment slowdown, we see increasing downside risk from the situation in Europe and at home,” Barclays Capital economists led by Yiping Huang wrote in a report earlier this week.
Barclays said hard-landing would be scenario in which the Chinese economic growth slows to between 5.5% to 6.5% in 2012.
Dow Jones Industrial Average
(DJI: ^DJI )| Index Value: | 11,153.98 |
|---|---|
| Trade Time: | 4:04PM EDT |
| Change: |  143.08 (1.30%) |
| Prev Close: | 11,010.90 |
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| Open: | 11,012.79 |
| Day's Range: | 10,965.45 -11,271.14 |
| 52wk Range: | 10,572.20 -12,928.50 |
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