The Goldman Sachs luxury goods stock basket surged as much as 2.4% after HSBC Holdings PLC upgraded major luxury industry heavyweights LVMH and Kering from Hold to Buy ratings.

The analyst team led by Erwan Rambourg anticipates a modest sales recovery for the remainder of this year and into 2026, with companies "returning to a solid profit growth trajectory."

"While U.S. consumers face near-term challenges in the fourth quarter, we believe Chinese consumer engagement will inevitably improve, and both factors will jointly drive performance growth next year," the analysts noted in their report.

LVMH shares climbed as much as 3.8%, reaching their highest level since May, with analysts optimistic about opportunities to streamline cost structures and enhance long-term profit margins.

Concerns about Louis Vuitton's ability to maintain mid-single-digit or higher growth rates have been overshadowed by confidence in Dior's recovery, with the target price raised from €535 to €625.

Kering shares gained up to 4.6%, hitting a three-month high, as analysts view the transformation risks potentially brought by new CEO Luca de Meo as relatively low, raising the target price from €200 to €300.

Fellow luxury peers Richemont and Swatch Group shares rose 2% and 2.5% respectively, offsetting the impact of HSBC's slight target price reductions.

Hermès shares declined as much as 1.2% after HSBC downgraded the company from Buy to Hold. Analysts believe the brand's sales growth will not accelerate in the second half, though they still regard it as "a company that significantly outperforms peers within our coverage universe," reducing the target price from €2,800 to €2,350.