Luxury goods exit, military stocks rise: Rheinmetall will replace Kering in the Euro Stoxx 50
JP Morgan stated that this adjustment will take effect on June 20. Rheinmetall's stock price has surged nearly twofold this year, soaring 26% in May alone, pushing its market value to nearly €87 billion. Against the backdrop of the ongoing Russia-Ukraine conflict and European countries reassessing their defense budgets, military enterprises have become the most direct beneficiaries. In contrast, Kering has fallen 28% year-to-date
German defense giant Rheinmetall, with its soaring stock price, is set to replace Kering, the parent company of Gucci, in the Euro Stoxx 50, the most important stock benchmark index in Europe.
According to JP Morgan strategist Pankaj Gupta, citing information from index provider Stoxx Ltd. on June 3, this adjustment will take effect on June 20.
Rheinmetall's stock price has surged nearly twofold so far this year, soaring 26% in May alone, pushing its market capitalization to nearly €87 billion ($98 billion). This scale has already surpassed more than half of the existing constituents in the Euro Stoxx 50 index.
Since February 2022, Rheinmetall's stock price has cumulatively surged about 1800%. Amid the ongoing Russia-Ukraine conflict and European countries reassessing their defense budgets, defense companies have become the most direct beneficiaries.
In stark contrast to Rheinmetall's performance is Kering's struggle. The luxury giant's stock price hit its lowest point since 2016 in April, down 28% year-to-date.
The main factor dragging down its performance is the sharp decline in consumer spending, while Trump's tariff policies have further exacerbated the outlook for the entire luxury goods industry.
Rheinmetall's entry into this widely tracked index may further boost investor sentiment in a market environment dominated by passive investment funds
