The Swiss stock market was still in the green late Wednesday morning, after a confident opening despite the escalation in the Middle East. All eyes were on the job creation figures in September in the private sector in the United States.
The Zurich market continued to ignore geopolitical tensions, with many market observers noting increased nervousness but no reason to panic.
On Tuesday, Israel threatened to retaliate for Iran’s launch of some 200 missiles towards its territory to avenge the deaths of the leaders of Lebanese Hezbollah and Palestinian Hamas, with Tehran responding that it will hit “all Israeli infrastructure” if it is attack.
“The question on everyone’s mind is obviously what Israel’s response will be to these latest attacks,” notes analyst John Plassard at Mirabaud. “Investors are now waiting for Israel’s response,” corroborates expert Mohit Kumar of Jefferies Bank, who explains that while waiting for this moment the market reaction has so far been cautious.
The economist maintains a positive view of the markets, but notes that it would be prudent “to maintain a low risk profile”. “Apart from geopolitical risks, the general macroeconomic environment is still favorable,” he assures.
The “unprecedented” escalation in the Middle East has resulted in a rise in the prices of oil and gold, as well as the dollar and the franc, safe haven currencies. Defense sector stocks, such as Lockheed Martin and Northrop Grumman, also rose, notes John Plassard.
In the euro zone, the unemployment rate remained stable in August compared to July, at 6.4% of the active population.
The other important events between now and the end of the week are the announcement on Thursday of the inflation rate in Switzerland for the month of September and, on Friday, the employment figures across the Atlantic, followed closely by the American Federal Reserve (Fed).
Around 11:00 a.m., the flagship SMI index was up 0.25% at 12,117.1 points. The SLI took 0.22% to 1984.45 points and the SPI 0.16% to 16,157.39 points.
However, some star stocks were in the red. Swisscom (-0.9%), Givaudan (-0.7%) and Partners Group (-0.7%) were the stocks that fell the most.
At the top of the ranking, we found Richemont (2.6%), despite the reduction of its price target by Deutsche Bank, UBS (+1.8%) as well as ABB (+0.9%), including Citigroup raised the price target.
In the heavyweight camp, Nestlé gained 0.02%, Novartis gained 0.2% and Roche dropped 0.04%.
On the broader market, Adecco lost 0.1% after issuing a bond of 300 million euros.
Doc Morris widened his loss by 5.7% after a lowering of recommendation from the HSBC bank, which now gives him “hold” instead of “buy”. (AWP)
