Zurich (awp) – A wait-and-see attitude remained in order on the Swiss Stock Exchange on Friday, with the indices continuing to hesitate on the direction to take as midday approached. While many investors remained hungry after the expected cut in key rates from the European Central Bank, they will focus on the publication in the afternoon of American employment figures in May, essential data to the direction of the monetary policy of the Federal Reserve (Fed).
Unveiled on Thursday, weekly employment data in the United States provided further evidence of the weakening of the labor market across the Atlantic, which strengthens the arguments in favor of at least a reduction in interest rates by the Federal Reserve this year, anticipates John Plassard of Mirabaud Banque. Data for the entire month of May should provide more clarity on this subject in the afternoon.
Returning to Thursday’s decision by the European Central Bank, John Plassard expresses a “bitter” feeling in the markets. “By carrying out a hawkish cut in rates, it is possible that in a few months, we will say that it was a ‘sword in the water’. Remember that historically a rate cut is followed by several others, which might not be the case this time.”
The parallel increase in the inflation target for this year and next year by the ECB demonstrates that the fight against rising prices is proving difficult and rules out a further rate cut in July, writes Ipek Ozkardeskaya, analyst Swissquote star. The market no longer expects a complete reduction in rates by October, continues the expert.
In addition to employment in the United States in May, investors will remain attentive in the afternoon to a speech by the President of the ECB, Christine Lagarde, on the state of the European economy.
On the side of the Swiss Stock Exchange, the SMI, after opening the session with a tiny increase of 0.07%, hesitated between green and red several times during the morning, the declines, like the progressions, remaining however very modest. Shortly before 11:00 a.m., the flagship index recorded 12,228.08 points, a decline of 0.11%. The SLI was a little less firm, dropping 0.19% to 1,982.49 points, while the broader SPI indicator dropped 0.12% to 16,231.07 points.
Among the thirty constituent stocks of the Swiss Leader Index, 22 lost ground and only eight gained. Of the three heavyweights on the list, only the good Roche (+0.9%) progressed, while Nestlé and Novartis both lost 0.1%.
SIG Group (+1.2%) climbed to the highest step of the provisional podium, ahead of the Basel pharmaceutical giant, while Richemont (+0.5%) placed itself in 3rd place, ahead of the bearer share Rock. The handful of winners still included Sandoz Group (+0.3%), SGS (+0.2%), Kühne + Nagel (+0.1%) and Lonza (+0.04%).
UBS (-0.6%) had slipped into the red. After the takeover of Credit Suisse by the number one Swiss bank, holders of amortized AT1 bonds are taking legal action against the Confederation. They filed suit in a New York court.
The plaintiffs challenge the order of March 19, 2023 of the federal financial market supervisory authority Finma relating to the emergency rescue of Credit Suisse by UBS. This stipulates that the AT1 bonds issued by Credit Suisse be reduced to zero. “With this order, Switzerland illegally infringed on the property rights of the plaintiffs,” writes the law firm Quinn Emanuel Urquhart & Sullivan.
At the bottom of the ranking, ABB fell 1.0% and inherited the red lantern, behind Swiss Life (-1.1%) and Swatch Group (-1%).
On the broader market, Investis jumped 3.4% after announcing the sale of its real estate services activities to the Finnish group PHM Group Holding, valuing them at 240 million Swiss francs. The company with Valais roots now intends to focus on the development of its real estate portfolio made up of residential properties located in the Lake Geneva region.
Temenos gained 2.0%. The Geneva-based banking software publisher announced the launch of a share buyback program of more than 200 million Swiss francs from June 10 to December 30. At the end of May, the British investment fund Petrus Advisers, which has more than 5% of Temenos’ capital (as of May 27), asked the group to launch such a program this year to the tune of at least 250 million Swiss francs. .
Clariant (+0.2%) benefited from an increase in Bernstein SG’s target to 15 Swiss francs, compared to 12.50 Swiss francs previously. The recommendation is maintained at “market perform”.
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