Swiss Stock Market Drops as Bond Yields Rise: Inflation and Rate Hike Concerns Lead to Investor Anxiety

2023-10-03 16:16:07

Zurich (awp) – The Swiss stock market lost further ground on Tuesday, continuing the negative momentum of the day before. The rise in bond yields makes stocks less attractive. Faced with concerns about inflation and future rate hikes from the US Federal Reserve (Fed), investors turned to less risky assets. The SMI finished below 10,800 points, near its lowest of the day.

In New York, Wall Street fell in the morning, also affected by the rise in bond rates, in particular the ten-year American government bond rate which reached a sixteen-year high.

“There was no particular news to explain this jump in yields, and it is for this very reason that this jump in yields added to investors’ anxiety,” noted Patrick O’Hare, from, in a note.

“One of the most worrying theories” involves fears about the deficit and the consequences of weakening consumer demand. In Switzerland, inflation increased slightly in September year-on-year to 1.7%, after 1.6% in August, driven by a clear increase in prices for local products. While fuel prices fell during the month under review, those of travel and particularly air transport accelerated.

The SMI ended down 0.92% at 10,763.37 points, with a low of 10,743.60 and a high of 10,883.80. The SLI dropped 0.95% to 1682.71 points and the SPI 0.92% to 14,108.92 points. Of the 30 star stocks, Geberit (+1.5%) and Adecco (+0.6%) are the only winners of the day.

The heavyweight Nestlé (-0.12%) limited the damage well. Roche (good -0.7%) and Novartis (-1.5%) declined more significantly.

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Sandoz will be listed on SIX on Wednesday and will enter the SLI instead of Adecco. The empowerment of the current generics and biosimilars subsidiary of Novartis should constitute the final stage of a refocusing initiated by the pharmaceutical juggernaut under the Joseph Jimenez era in 2016 and carried out mainly since then under the leadership of his successor Vasant Narasimhan.

Partners Group (-3.3%) finished bottom, behind Holcim (-2.6%) and Julius Bär (-2.3%).

According to the portal Inside Paradeplatz, the Zug-based asset manager Partners Group plans to immediately cut 105 positions. By the end of next year, other departures should follow. Contacted by AWP, a spokesperson did not want to comment on these figures. However, he indicated that the company “regularly checks its organizational structure”, without setting a quantified objective.

In Paris, the Court of Cassation on Tuesday ordered the reopening of the debates in the case of the cement manufacturer Lafarge in Syria, in the hands of Holcim since 2015. The French company had filed an appeal against a judgment of the Paris Court of Appeal in May 2022, concerning the counts of complicity in crimes against humanity and endangering the lives of others, which she contests.

Sika (-0.5%) presented its strategic plan for 2028 during its investor day, with new medium-term objectives. The Zougois building chemist aims to generate a margin for gross operating profit (Ebitda) of 20 to 23% compared to 19% in 2022. Sika is also targeting annual sales growth of 6 to 9% in local currencies, after 6 to 8 % until 2023.

UBS (-2.0%) denied press reports relayed last week by numerous media, reporting an in-depth investigation by the American Department of Justice (DoJ) into failures to apply sanctions adopted by Washington against Russian clients.

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On the broader market, Vontobel (-2.0%) announced that the general management, soon to be vacant following the departure of Zeno Staub, would be entrusted to two people, Christel Rendu de Lint, who currently heads the investment , and Georg Schubiger, who is responsible for asset management. The new co-CEOs will retain their current responsibilities.

The real estate company Swiss Finance & Property (-0.6%) has appointed Sascha Küng as financial director, succeeding Reto Schnabel at the start of next year. The latter will now focus on the financial management of the subsidiary dedicated to Swiss Finance & Property Funds.

The real estate company Züblin (+3.1%) announced the early extension of a long-standing contract with one of the five largest tenants in its portfolio. The numerical details have not been revealed.


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