STOCKS NEWS EUROPE-Luxury stocks knocked lower by C.Suisse note

Shares in luxury goods makers drop, with LVMH (TLO: LVMH.TI - news) down 1.7 percent, Kering (Other OTC: PPRUF - news) down 1.3 percent and Hermes down 0.8 percent, as traders cite a downbeat note from Credit Suisse (NYSE: CS - news) analysts, who downgrade the sector to 'benchmark' from 'overweight'.

"Circa 50 percent of revenues are from global emerging markets," Credit Suisse analysts write.

Around a third of European luxury goods' sales come from the Chinese consumer, making China the single most important market for the sector, the analysts write.

"We believe that a growth slowdown here is the most significant global macro risk and that consensus estimates for China's growth, at 7.4 percent GDP growth for this year and 7.2 percent for 2015, are still too sanguine."

"The risks of structurally slower China growth as well as the negative impact of China's anti-corruption measures on high-end spending do not yet seem to be adequately reflected in consensus expectations for luxury goods sales growth, which, at 12 percent on a 12-month forward basis, is close to the top-end of its 10-year range."

Shares in luxury goods makers - which were seen as safe-havens during the heat of the euro zone debt crisis due to their strong exposure to emerging markets - have fallen out of favour among fund managers in the past few months, due to doubts about the pace of growth in emerging markets.

LVMH stock is down 10 percent since mid-September, while both Hermes and Kering are down 15 percent over the same period, strongly underperforming a 7 percent rise in the STOXX Europe 600 benchmark.

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