Zurich (awp) – The Swiss stock market was preparing for a lower opening on Wednesday morning, after finishing narrowly in the green the day before. Market observers were less confident due to the no-confidence motions expected to lead to the fall of the French government and were eyeing the Services PMI indices in the Eurozone and the United States, as well as the publication of the Beige Book of the Fed.
“The European indices should open without any real trend this morning in the wake of the American closing and while awaiting the vote of no confidence (motion of censure) in the French government which will take place this afternoon and which could again leave the country without a Prime Minister”, predicted a little earlier the analyst John Plassard of Mirabaud Banque, in his morning stock market commentary.
He notes that political instability in the neighboring country has direct consequences on the markets: “At the stock market level first of all, the yields on French sovereign bonds are approaching those of Italy, reflecting a loss of investor confidence in the country’s budgetary stability.
“This uncertainty has also impacted stock market performance, with the CAC 40 underperforming compared to other European indices, posting only +1.8% year-on-year (-3% since the start of the year), compared to more than 20% for Germany or Spain,” he adds.
At Jefferies, analyst Mohit Kumar is of the opinion that the market is “relatively optimistic” regarding French policy, for two reasons: “First, most ‘fast money’ accounts are already overdrawn on the France In our positioning indices, French bonds are at -4.1 (on a scale of -10 to +10). Secondly, we are not in the presence of a risk of a surge as was the case for. Greece after the global financial crisis or for Italy due to political risks Even if the government falls, we see spreads increasing to 100, then gradually widening in the first quarter as net supply increases.
In the euro zone, the publication of the PMI index for the services sector in November was expected in the morning, while data on the same subject should also be published in the United States later in the afternoon. Investors were also awaiting the Beige Book of the Federal Reserve (Fed), a preparatory document from the American central bank for the next meeting of the Federal Open Market Committee, an organ of the American Federal Reserve, on December 17 and 18.
San Francisco Fed Managing Director Mary Daly “said there was no certainty the Fed would cut rates this month, but the option remained on the table. Activity on Fed funds futures give more than a 70% chance of another 25 basis point cut at this month’s FOMC meeting This week’s employment and inflation data. next week will have the last word”, notes for her part, Swissquote expert Ipek Ozkardeskaya.
Around 9:05 a.m. on the Swiss Stock Exchange, the Swiss Market Index (SMI) dropped 0.22% to 11,808.808 points, the Swiss Leader Index (SLI) lost 0.06% to 1950.93 points and the Swiss Performance Index (SPI) 0.13% to 15,716.70 points. Of the thirty main valuations, 14 were in the red and sixteen were in green.
The pharmaceutical giant Novartis posted the largest decline (-1.6%). It was followed by Swiss Life (-1.2%), whose JPMorgan bank lowered its rating to “underweight” from “neutral” and reduced the price target to 670 Swiss francs from 720 Swiss francs and by Kühne + Nagel (-1.1%).
The other heavyweights in the market also lost ground, Nestlé by 0.4% and the good Roche by 0.2%.
At the top of the list were Logitech (+1.1%), Partners Group and ABB (+0.8% each). Barclays raised the price target for the electrical engineering and automation specialist to 42 Swiss francs, compared to 40 Swiss francs previously.
On the broader market, CPH Group shed 0.4%. The Lucerne industrial group, via its Perlen Packaging division, has acquired for an undisclosed amount LOG Pharma, an Israeli specialist in solutions for the pharmaceutical and medical industry, also active in Hungary. The transaction is expected to be finalized in the first quarter of 2025.
Kudelski, for his part, remained stable. Its Kudelski IoT division has entered into a strategic partnership with Taiwanese PUFsecurity, aiming to provide advanced security solutions for connected devices.
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