The Switzerland stock market recovered after a weak start on Thursday, and after swinging between gains and losses, managed to close modestly higher.
Investors digested the central bank’s interest rate decision and outlook for the economy, in addition to reacting to corporate news and updates on the virus front.
The benchmark SMI, which slid to 11,017.32 in early trades, rose to 11,102.78 around noon, and despite falling into negative territory soon thereafter, recovered to close with a gain of 34.94 points or 0.32% at 11,098.81.
Novartis, up 1.3%, was the top gainer in the SMI index. Novartis is reportedly planning to close its gene therapy manufacturing plant in Longmont, Colorado, and lay off 400 workers.
In a March 24 news release, the pharmacy company said it will close the 692,000-square-foot drugmaking facility by July 9, just 14 months after its opening. The company said that laid-off workers will be offered severance packages, job placement support and some other benefits.
Swiss Life Holding, LafargeHolcim, Credit Suisse, Givaudan, Alcon and UBS Group gained 0.5 to 0.9%.
SGS declined by about 2.3%. Lonza Group and Richemont lost 1.2% and 1%, respectively, while ABB ended 0.8% down.
In the midcap section, Barry Callebaut, Vifor Pharma, Dufry, Lindt & Spruengli and Sonova gained 1.1 to 1.4%.
Swiss Prime Site and BB Biotech lost 4.4% and 2%, respectively. SIG Combibloc, Schindler Holding, Tecan Group, Schindler Ps and Kuehne & Nagel shed 1 to 1.7%.
Switzerland’s central bank retained its negative interest rate and softened its view on the currency market interventions given the recent fall in the Swiss franc against the euro.
Policymakers of the Swiss National Bank retained the policy rate and interest on sight deposits at the SNB at -0.75%, as widely expected, on Thursday.
Despite the recent weakening, the bank repeated that the Swiss franc remains highly valued. The bank said it is willing to intervene in the foreign exchange market ‘as necessary’, while taking the overall currency situation into consideration.
The central bank raised its inflation outlook citing the rise in oil prices and the weaker Swiss franc. Consumer prices are forecast to rise 0.2% in 2021 instead of nil growth estimated in December. The inflation outlook for 2022 was revised up to 0.4% from 0.2%. For 2023, inflation is seen at 0.5%.
The SNB expects the economy to grow in the range of 2.5% to 3% in 2021, unchanged from the previous projection.
Market Analysis
Swiss Market Closes Modestly Higher
2021-03-25 18:06:28
