STOCKS NEWS EUROPE-Kering sinks after posting profit drop

Shares of Kering (Other OTC: PPRUF - news) fall 3.5 percent, the biggest losers on the CAC 40, after the owner of the Yves Saint Laurent, Bottega Veneta and Gucci brands reports a steep drop in full-year profits, with sales growth at Gucci almost grounding to a halt.

"This confirms the trade idea that a lot of people have been playing recently: buy exposure to Europe, buy exposure to the U.S., and avoid exposure to emerging markets," a Paris-based trader says.

Luxury shares - seen as safe-havens for fund managers during the heat of the euro zone debt crisis in the past years - have fallen out of favour in the past few months, hurt by their strong exposure to emerging markets.

Louis Vuitton owner LVMH (TLO: LVMH.TI - news) derives 38 percent of its sales from emerging markets, 35 percent for Kering, and 39 percent for smaller rival Dior , according to data from MSCI (NYSE: MSCI - news) .

Burberry has a 33 percent exposure to emerging markets, and luxury watch maker Richemont's exposure is 48 percent, according to the data.

Reuters Messaging: blaise.robinson.thomsonreuters.com@reuters.net