Zurich Stock Exchange: Caution required ahead of political deadlines

Zurich Stock Exchange: Caution required ahead of political deadlines
Zurich Stock Exchange: Caution required ahead of political deadlines

Zurich (awp) – The Swiss stock market continued on its cautious path on Wednesday as midday approached. The European political agenda, with elections expected this week in the United Kingdom and France, seems to be freezing investors.

“While eyes remain on political developments in France and the UK this week, traders and analysts were pleased to see a positive shift on the monetary front,” said Pierre Veyret, an analyst at ActivTrades. On Tuesday, Federal Reserve Chairman Jerome Powell hailed progress in slowing US inflation, rekindling hopes of an upcoming rate cut.

“However, investors are not out of the woods yet, with continued high volatility expected for the rest of the week, when the publication of important macroeconomic data is looming,” continued Mr. Veyret.

In China, activity in the services sector was once again in the green in June, but at a slower pace of expansion, according to the purchasing managers’ index (PMI). In France, private sector activity recorded “a slight contraction” in June, according to the composite PMI index of overall activity.

In Switzerland, the volume of the mortgage market increased by 29 billion Swiss francs to a total of 1,239 billion last year, an increase of 2.4% compared to 2022. The growth, the weakest in a decade, was significantly lower than the average of 3.1% recorded over the past ten years, according to a study by Moneypark.

In the United States, the private sector job creation in June, the trade balance in May and the index of activity in services in June are on the agenda. The Federal Reserve (Fed) will also publish the minutes of its last monetary policy meeting in the evening.

At 11:00, the SMI fell by 0.06% to 12,003.81 points, the SLI gained 0.16% to 1,948.46 points and the SPI gained 0.1% to 15,971.46 points. Of the thirty leading stocks, nineteen rose, eight fell and three (Givaudan, Richemont and Sonova) were stable.

The insurance sector suffered the heaviest losses, with Swiss Life (-1.6%), Swiss Re (-1.3%) and Zurich (-1.2%) coming in at the bottom of the ranking. The intensity of Hurricane Beryl, which is about to hit Jamaica and then the Cayman Islands after causing considerable destruction in the south-east Caribbean, was clearly worrying capital holders.

The three heavyweights Roche (benefit certificate: -0.4%, bearer: -0.6%), Novartis (-0.5%) and Nestlé (-0.1%) also pulled the indices down.

At the other end of the table, the provisional podium brought together Lonza (+2.8%), Lindt (+1.9%) and Straumann tied with SGS (each +1.6%). ABB (+0.6%) was also sought after, driven by a price target increase by Kepler Cheuvreux.

Holcim (+0.3%) has announced the closure of the historic production site in Holderbank as early as 2026. The transfer of activities to Zug marks the end of Holcim’s presence in the Aargau municipality, where the company was founded 114 years ago and from which it originally took its name.

VAT Group (+0.3%) reacted weakly to the increase in Jefferies’ price target to 700 Swiss francs, from 625 Swiss francs, confirming its buy recommendation.

Alcon (+0.7%) benefited from a price target increase decided by Berenberg. The analyst expects sales growth in the second half to exceed current forecasts of 7 to 9%.

Outside SMI, the Aargau-based heating and air conditioning company Zehnder Group (+2.8%) is extending its geographical coverage to the Iberian Peninsula with the acquisition of its Spanish competitor Siber for around 86 million euros (83 million Swiss francs).

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