Shares in French luxury group Hermes (HRMS.PA) gain 2.1 percent, featuring among the top gainers on France's broad SBF 120 .SBF120 index, after Goldman Sachs upgrades its rating on the shares to "neutral" from "sell", citing valuation.

Hermes shop opening in Chicago, June 2010

"We view Hermes' valuation premium versus its luxury sector peers as sustainable over the long term and no longer expect a de-rating on valuation grounds," Goldman analysts write in a note.

"The second-quarter sales performance was impressive, even when compared with high-performing luxury peers. This, along with management's more optimistic guidance, leads us to increase our sales forecasts by 7 percent, 9 percent and 10 percent in FY10E, FY11E and FY12E, and our EPS estimates by a respective 10 percent, 15 percent and 19 percent."

Hermes stock is up 47 percent so far this year, outpacing the STOXX personal and household goods index's .SXQP 14 percent rise over the same period.