Swiss Market Closes Moderately Lower After SNB Rate Decision

RTTNews | 658 days ago
Swiss Market Closes Moderately Lower After SNB Rate Decision

(RTTNews) - Despite recovering from a weak start, the Switzerland stock market turned easy by early afternoon on Thursday and struggled for support thereafter to eventually close the day's session with moderate losses.

Concerns about the outlook for interest rates weighed on the market, after the Swiss National Bank (SNB) unexpectedly left its benchmark rate unchanged, but left the door open for future hikes.

The benchmark SMI, which climbed to 11,219.56 after opening modestly lower, ended the day with a loss of 69.37 points or 0.62% at 11,084.74, slightly off the day's low of 11,074.47.

Lonza Group and Partners Group both ended lower by about 3.25%. Alcon, Roche Holding and UBS Group lost 1.9 to 2.1%.

Sika ended lower by 1.19%. ABB, Holcim, Kuehne & Nagel, Geberit and Givaudan posted moderate losses.

Nestle climbed 1.12%. Swisscom and Sonova ended higher by 0.91% and 0.87%, respectively.

In the Mid Price Index, AMS and Bachem Holding ended down 4.02% and 3.48%, respectively. Dufry, Tecan Group and Straumann Holding lost 2.89%, 2.67% and 2.34%, respectively.

Ems Chemie Holding, SIG Combibloc, Clariant, SGS, Barry Callebaut and Julius Baer lost 1.1 to 2%.

The SNB Governing Board, chaired by Thomas Jordan, decided to hold the policy rate at 1.75 percent, while markets expected a final quarter-point hike.

The central bank said it cannot be ruled out that a further tightening of monetary policy may become necessary to ensure price stability over the medium term. The bank said it will monitor the development of inflation closely in the coming months.

Underlying inflationary pressures have eased somewhat, while monetary conditions have tightened again due to the appreciation of the Swiss franc since the June policy session, Jordan observed.

Inflation outlook for 2023 and 2024 was retained at 2.2%, while the bank downgraded its forecast for 2025 to 1.9% from 2.1%.

Further, the bank observed that subdued global demand and the loss of purchasing power due to inflation and restrictive financing conditions are dampening the Swiss economic growth.

The bank forecast the economic growth to remain weak for the rest of the year. GDP growth is seen at around 1 percent this year, which was unchanged from the previous projection.

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