The Swiss stock market closed in bright red on Tuesday, its flagship SMI index having increased its losses throughout the day. Investors remained frozen while awaiting monetary policy decisions on Thursday from the European Central Bank (ECB) and the Swiss National Bank (SNB).
“Nine of the ten largest central banks are meeting this month,” noted John Plassard of Mirabaud Banque this morning. Before the ECB meeting, “most market players should adopt a rather cautious attitude” in Europe, added Andreas Lipkow, independent analyst.
As for the Frankfurt central bank, a further reduction in its rates of 0.25 points is mainly expected by the markets, even if many investors are calling for a reduction of 0.50 points given the growth sluggish in the euro zone. The ECB must answer the question of what it wants to do next year: fight inflation or ensure growth, especially in view of political uncertainties and new elections in Germany,” stressed Jochen Stanzl of CMCMarkets.
As for the SNB’s decision, the next reduction in its key rate seems certain. On the other hand, the question of the extent of the decline remains open. In the long term, some experts do not rule out a return to a negative interest rate. Experts unanimously believe that the new president of the Swiss central bank, Martin Schlegel, will further ease monetary policy during his first decision on the interest rate. In September, the central bank had already taken the lead by declaring that further cuts might be necessary.
In today’s rare macroeconomic information, China showed a more marked slowdown than expected in the growth of its exports in November. After changing its tone on its monetary policy, Beijing will focus this week on setting its economic priorities for 2025, during a crucial conference scrutinized by the markets which could outline reinforced recovery measures.
Finally in Germany, inflation continued to rise in November, driven by service prices, according to final data. The consumer price index increased by 2.2% year-on-year in Europe’s largest economy.
Across the Atlantic, Wall Street opened in disarray with the Dow Jones index down 0.2%, while those of the S&P 500 and Nasdaq gained 0.1% and 0.3% respectively.
The SMI ended down 1.0% at 11,642.39 points, the lowest of the day. The SLI dropped 0.8% to 1928.69 points and the broader SPI indicator fell to 15,536.12 points.
Of the thirty valuations in the Swiss Leader Index, twenty-five were displayed in red and only five in green. As for the three heavyweights, the good Roche fell by 1.3%, as did the registered Nestlé and Novartis by 1.5% and 0.7% respectively.
The world number one in flavorings and fragrances Givaudan took first place (+1.7%), ahead of the pharmaceutical subcontractor Lonza (+0.8%) and the Geneva specialist in certification and inspection SGS (+ 0.7%).
At the bottom of the table, UBS (-2.1%) finished at the bottom of the table. The American asset manager AllianceBernstein is preparing to take Switzerland to court over the decision to reduce Credit Suisse’s so-called AT1 bonds to zero during its emergency rescue last year via the takeover of the number two Swiss bank by its rival UBS, believes it knows Financial Times.
The leading Swiss bank was preceded by Sika (-2.0%) and Partners Groups (-1.5%).
On the broader market, Santhera appreciated by 8.8% in the wake of a British recommendation for its Agamree treatment against Duchenne muscular dystrophy.
The Lucerne steelmaker Swiss Steel took off 119.56% after taking note of the National Council’s commitment in favor of steel and aluminum production companies in economic difficulty. The Council of States has yet to decide on the boost.
https://agefi.com/actualites/politique/le-national-accorde-un-soutien-au-secteur-de-lacier
Finally, the Banque cantonale de Genève (+0.2%) benefited from confirmation of its »AA/A-1+« rating with an outlook still »stable« by the rating agency S&P Global Ratings. (AWP)
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