The Swiss stock market started the last session of the week on a good note. While the flow of information remains modest, investors, still hesitant, are focusing all their attention on the publication in the afternoon of the American PCE inflation indicator, before the first round of the very uncertain legislative elections in France.
Thursday evening, the main American indices once again closed very slightly higher, before the publication of inflation figures (PCE) in the United States and the “famous” American presidential debate between Joe Biden and Donald Trump, observes John Plassard, from Mirabaud Banque. Described as “returned to justice” by the current president, Donald Trump made a series of false assertions with aplomb, Joe Biden being offensive in substance, but very confused in form. The two American presidential candidates clashed over inflation, immigration and Ukraine.
European markets should also open slightly higher before a weekend where “anything” can happen in France during the first round of legislative elections, adds the expert. Still in France, the consumer price index rose by 2.1% over one year in June, a slight decline after 2.3% in May.
Inflation is thus resuming its slow decline after a slight increase in May, when it had increased by 0.1 points compared to April (2.2% over one year). In June 2023, it still reached 4.5%. The decline observed in June is explained both by a “slowdown” in the rise in energy and food prices, and a change at the same rate as in May in the prices of tobacco, manufactured products and services.
Before looking at US inflation data for May, investors will be looking at July inflation in Spain and Italy.
After starting the session with an increase of 0.25%, the Swiss Market Index (SMI) gave up a little ground in the very first exchanges, noting around 9:20 a.m. at 12,014.06 points, an increase of 0.08%. The Swiss Leader Index (SLI) did exactly the same at 1949.18 points, while the broader Swiss Performance Index rose just 0.07% to 15,953.48 points.
Among the thirty constituent stocks of the SLI, twelve lost ground and seventeen gained, while Zurich Insurance stood still. As for the three heavyweights of the rating, they showed a contrasting evolution, Novartis appreciating by 0.4%, while the good Roche (-0.1%) and the registered Nestlé (-0.4%) weighed on the performance.
At the bottom of the table, Straumann (-1.2%) inherited the red lantern, with UBS having lowered the target price for the Basel-based dental implant manufacturer to 120 francs, compared to 148 francs previously, while maintaining the recommendation at “neutral”. The players linked to the construction sector, Geberit (-0.9%) and Sika (-0.7%), as well as Holcim (-0.1%) to a lesser extent, were particularly struggling.
The Geneva luxury giant Richemont (-0.1%) also declined, as did the Bienne watchmaker Swatch Group (-0.3%). HSBC lowered the price target for the world number one watchmaker to 210 francs, compared to 250 francs previously. However, the recommendation is maintained at “hold”.
On the broader market side, Starragtornos fell by 6.5%. The St. Gallo-Prévôts manufacturer of machine tools has warned that its first half in 2024 will not have been up to the same period a year earlier, on a pro forma basis. (AWP)
