The SMI opened slightly higher on Monday, reassured by the fall in oil prices, a consequence of limited Israeli strikes on Iran. The approach of the outcome of the presidential election in the United States, where the two candidates Donald Trump and Kamala Harris are redoubling their efforts to garner votes, however, kept investors in suspense.
Oil prices plummeted on Monday, after Israeli strikes spared Iranian energy sites, enough to allay fears about the supply of black gold, even though the outlook for global demand for crude oil remains gloomy due in particular to the economic weakness in China.
Concerns over Iranian oil
Around 9:00 a.m., the price of a barrel of Brent from the North Sea, for delivery in December, fell 4.1% to $72.93. That of West Texas Intermediate (WTI), at the same maturity, plunged 4.4% to $68.66.
“(Israel’s) targeted response after the Iranian attacks fuels hopes for a de-escalation of the conflict between the two countries, which could stabilize oil prices,” Activtrades analyst Frank Sohlleder said in a comment.
At the same time, the presidential election in the United States is attracting market attention. “The markets are observing with concern Trump’s plans for massive increases in customs duties”, with import taxes of up to 60% on Chinese products, recalled Frank Sohlleder. This would provoke a backlash from China and strain global supply chains.
The macroeconomic agenda remains busy with, on Wednesday, the figures for European and American growth in the 3rd quarter and German inflation in October. On Thursday, we will have to monitor the Chinese PMI and inflation in the euro zone and the United States (PCE). And on Friday, it will be the turn of inflation in Switzerland.
The results season will continue, including the quarterly performances of Novartis, Straumann, UBS and Geberit.
Majority of stars in green
Around 9:10 a.m., the flagship SMI index rose 0.07% to 12,193.60 points, after closing on Friday with a slight rebound of 0.09%. The SLI gained 0.17% to 1986.91 points and the SPI gained 0.09% to 16,219.62 points.
In the virtual absence of any company news likely to influence prices, the majority of star stocks were on the right side of the bar.
Sonova (+5.0%) jumped after news on its contract with the American retail giant Costco.
Holcim (+1.0%) and SIG Group (+1.0%) were also up. Analysts from Vontobel, Morgan Stanley and RBC have raised the price target of the construction materials giant, after the publication of its third quarter results on Friday.
Novartis (+0.2%), which publishes its quarterly results on Tuesday, also progressed, as did the other heavyweight Nestlé (+0.1%). Roche (-0.1%), on the other hand, gave up its gains.
During the Socialist Party congress in Davos on Sunday, the PS demanded the takeover of Sandoz (+0.3%), a former subsidiary of Novartis, by the Confederation.
On Sunday, Novartis reported positive study results with its drug Fabhalta in the treatment of Cs glomerulopathy kidney disease. The data shows that the drug sustainably reduced the rate of proteinuria after 12 months.
Sika (-0.2%), on the other hand, was placed at the bottom of the table, also after its quarterly results on Friday. CFRA experts lowered the construction chemist’s recommendation to “hold,” as did the price target.
Lindt (-0.1%) and Lonza (-0.1%) were among the small group of losers.
In the broader market, GAM (-17.1%) collapsed. The asset manager is refining the outlines of its next capital increase, which should see its reference shareholder Rock Investment increase its participation. He had already committed in the spring to injecting up to 100 million francs into the operation, effectively covering the entire offer. (AWP)
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