Cartier owner Richemont posted Friday a hefty drop in net profit for the first half of the year as watch sales sank in China, where weak consumer spending has hit the luxury sector.Richemont said its profit after tax reached 457 million euros ($492 million), down from 1.5 billion euros in the same six-month period last year as it booked a 1.2-billion-euro write-down from the sale of its Yoox-Net-A-Porter online fashion business.Its net profit for continuing operations was 1.7 billion euros ($1.8 billion) in the six-month period ending in September, 20 percent lower than in 2023 and less than expected by analysts polled by Swiss news agency AWP.Global sales fell one percent to 10.1 billion euros.Sales from the Asia-Pacific region were down by almost a fifth while all other regions in the world posted “solid growth”, Richemont said in a results statement.Citing “reduced consumer spending” in China, Richemont said growth in other Asian countries was “more than offset” by a double-digit drop in sales in the world’s second biggest economy.”The global watch market is experiencing a slowdown, particularly in China, which is affecting all watchmaking brands globally, with the high-end segments showing greater resilience,” Richemont chairman Johann Rupert said in the statement.He said Chinese demand “will take longer to recover”.Last month, French group LVMH, the world’s biggest luxury company whose brands include Louis Vuitton, Dior and Bulgari, reported a 4.4 percent drop in third-quarter sales.Gucci owner Kering said its sales sank 15 percent in the same quarter due to slowing consumer spending in China.Richemont’s stock price fell more than four percent in the Swiss stock exchange.”There is a slowdown in China that we are experiencing like our competitors,” Richemont chief executive Nicolas Bos said in a conference call.”We have no clue on how long it will last and whether we’ve reached the bottom or not,” he said.

China on Friday unveiled some of its most ambitious plans in years to lift local government debt, following a meeting of lawmakers eyeing the possibility of intensified trade tensions with US president-elect Donald Trump.Local governments in China face a ballooning debt burden of $5.6 trillion, according to Beijing, raising worries about wider economic stability. The International Monetary Fund (IMF) put the figure at $8.4 trillion last year.Policymakers who gathered in Beijing this week voted to swap hidden debts — defined as borrowing for which a government is liable, but which is not disclosed to its citizens or to other creditors.The local government debt limit will be raised by six trillion yuan ($840 billion) which will be used to replace existing hidden debts, freeing up space for local governments to better develop the economy and protect people’s livelihood, state broadcaster CCTV said.The move was taken after “fully considering the international and domestic development environment, ensuring the smooth operation of the economy and finance,” finance minister Lan Fo’an told a press conference in Beijing.”Since the beginning of this year, some new situations and problems have arisen in economic operations,” he admitted.- ‘Cheaper debt ‘ -The debt ceiling will be raised every year from 2024 to 2026, with a total of $558 billion of hidden debt that can be replaced, Lan explained.And $112 billion “will be arranged from new local government special bonds every year for five consecutive years to supplement government financial resources”, he added.Lawmakers also approved a new energy law to promote carbon neutrality, as Beijing moves ahead with its pledge to decarbonise its economy by 2060.Zhiwei Zhang, the chief economist at Pinpoint Asset Management said the debt swap “is an important policy measure which helps local government to alleviate their debt burden”. But the programme was unlikely to be enough to “greatly release spending power of local governments”, Rhodium Group’s Allen Feng warned.”The debt is not gone,” he told AFP. “It’s cheaper and easier to roll over… but it’s not a gamechanger.”- Taking stock of Trump -Officials were this week keeping close tabs on the US vote as they gathered in the Chinese capital for a meeting of the country’s top lawmaking body.Trump has promised punishing tariffs on Chinese goods that threaten further grief for the world’s second-largest economy, which is already grappling with a prolonged housing crisis and sluggish consumption.Observers say Beijing could seek to cushion that blow with a long-awaited “bazooka stimulus” for the economy.This week’s meeting, originally scheduled for late October, was likely pushed back to allow “policymakers a chance to address a possible Trump win”, Lynn Song, chief economist for Greater China at ING, said.”In our view, the odds for a larger policy support package will rise somewhat with a Trump victory,” he added.Trump’s victory is “not necessarily bad for China as this may ‘pressure’ Beijing for a bigger stimulus”, Qi Wang, CIO of UOB Kay Hian Wealth Management, said on X.Beijing began to unveil a raft of measures in September aimed at boosting economic activity, including rate cuts and the easing of some home purchasing restrictions, but analysts have bemoaned the lack of detail so far.- ‘Turning point’ -Trump’s re-election provides a need for greater urgency, experts say, though caution may still prevail as officials try to avoid piling on more government debt.”Any potential stimulus size may be bigger, but so is the pressure,” Gary Ng, senior economist at Natixis, said.”The market may still not get the economic boosters it wants,” he warned.In Beijing on Friday, workers expressed cautious optimism about the future of the economy.Han Xi, a 32-year-old man from Shanxi province in northern China, began a new auditing job in Beijing this week after resigning from his previous company in April.”I have sent out resumes during this period, but you can see it takes more than half a year to get a new job,” Han told AFP, adding that “many companies are laying off employees right now”.”Even though we’re still in a downturn cycle, I think we are close to the turning point, though we haven’t quite reached it yet.”

European and Asian stock markets mostly retreated Friday as US and China policy updates cause concern about growth outlooks in the world’s two biggest economies.There is unease that US president-elect Donald Trump’s planned tax cuts and import tariffs will rekindle inflation in the United States and beyond, which could in turn see the Federal Reserve scale back on interest-rate cuts.Europe’s main stock markets lost almost one percent around midday, despite Wall Street striking fresh record highs Thursday after the Fed trimmed US borrowing costs by 25 basis points.The dollar traded mixed against main rivals Friday.”(Fed) news which ordinarily would have drawn a lot of the market’s focus has been pushed down the agenda as attention is turned to the implications of Donald Trump’s return to the White House,” noted Russ Mould, investment director at AJ Bell trading group.Chinese stocks ended lower Friday ahead of fresh announcements aimed at stimulating China’s struggling economy.China unveiled some of its most ambitious plans in years to lift local government debt following a meeting of lawmakers eyeing the possibility of intensified trade tensions with Trump.Chinese media said officials in Beijing would raise the debt ceiling for local governments by $840 billion.”The market reaction shows that traders do not see these measures as boosting consumption, and instead they are designed to stop a financial crisis domestically in China,” concluded Kathleen Brooks, research director at traders XTB. China broadcaster CCTV described the move as the country’s “most powerful debt reduction measure in recent years”, adding it would free “up space for local governments to better develop the economy and protect people’s livelihood”.It came amid uncertainty about the outlook for China after the election of Trump, who warned during his campaign that he would hit imports from the country with huge tariffs of up to 60 percent.”On balance, it is likely that Trump’s electoral victory presents additional downward pressure to China’s growth in the next few years (depending on various policy responses in both the US and China),” said National Australia Bank’s Gerard Burg.- Key figures around 1130 GMT -London – FTSE 100: DOWN 0.9 percent at 8,064.58 pointsParis – CAC 40: DOWN 0.9 percent at 7,356.75Frankfurt – DAX: DOWN 0.9 percent at 19,193.31Tokyo – Nikkei 225: UP 0.3 percent at 39,500.37 (close)Hong Kong – Hang Seng Index: DOWN 1.1 percent at 20,728.19 (close)Shanghai – Composite: DOWN 0.5 percent at 3,452.30 (close)New York – Dow: FLAT at 43,729.34 (close)Euro/dollar: DOWN at $1.0795 from $1.0801 on ThursdayPound/dollar: DOWN at $1.2973 from $1.2985Dollar/yen: DOWN at 152.31 yen from 152.92 yenEuro/pound: UP at 83.20 pence from 83.18 penceWest Texas Intermediate: DOWN 1.1 percent at $71.56 per barrelBrent North Sea Crude: DOWN 0.9 percent at $74.95 per barrel

Sony’s net profit jumped in the second quarter thanks to stronger sales in gaming, music and imaging sensors, the PlayStation maker said Friday as it left its annual profit forecasts unchanged.The yen’s weakness against the dollar and euro had a positive impact on takings in those key sectors, the Japanese conglomerate said.However, Sony Pictures suffered from “lower series deliveries” for television, “in part due to production delays related to the strikes in Hollywood”.Sony’s earnings release comes a day after its PlayStation 5 Pro console hit shelves, with a price tag that has raised eyebrows among gamers.In Europe the device costs an eye-watering 799.99 euros ($860) — 250 euros higher than the older version — and almost 120,000 yen ($780) in Sony’s home market of Japan.Sony president Hiroki Totoki told reporters that while “various people have made various comments” about the price, it has not had a negative impact on sales.For July-September, Sony logged net profit of 338.5 billion yen ($2.2 billion), up 69 percent from 200.1 billion yen in the same period a year ago.It still forecasts a full-year net profit of 980 billion yen.The company also maintained its operating profit outlook, but revised its sales forecast upwards slightly.The company said Friday that an increase in sales for imaging sensors — used in phone cameras — as well as the “positive impact of foreign exchange rates” contributed to growth in the operating profit for that segment.The yen hit a four-decade low against the dollar in July, having plunged in value since early 2022.Reforms to Sony’s gaming business, including in cost reduction and sales marketing, “brought a relatively good result for this period”, Totoki said on Friday.Music streaming is also a money-spinner for Sony, which has an impressive back catalogue and whose current roster includes top artists such as Beyonce and Lil Nas X.According to recent reports in Variety and the Financial Times, citing sources, British rockers Pink Floyd have agreed to sell their recorded music and name-and-likeness rights to Sony Music for around $400 million.Acquiring back catalogues “shows our commitment to artists” and “is expected to have a positive impact on our music business”, Totoki said without giving details.When asked about Donald Trump’s victory in this week’s US presidential election, Totoki said Sony was considering, in a broad sense, how best to deal with any new tariffs that could be imposed.”Our position is that we respect the US citizens’ choice, and as I’m not a geopolitics specialist, I’ll let those specialists give their analysis,” he said.But “the impact the US economy has on the global economy and on geopolitics is extremely big, and that in turn would have impact on our business”.”So we’ll squarely observe the facts, make forecasts, and do whatever we can.”