The flagship index ended down 1.55% 10,137.78 points, with a low of 10,091.87 and a high of 10,322.19 marked at the very start of the session.
The Swiss stock market ended on a sharply negative note on Friday. The SMI recorded a new low for the year and since November 2020, a little below the 10,100 point mark, at the very beginning of the followingnoon, before recovering a little and ending above this level. The recent rate hikes by the main central banks and fears of their repercussions on the real economy weighed on the mood.
In New York, Wall Street retreated in the morning, close to the lows of the year as a “catastrophic” week ended, which saw investors depressed by the harder than expected tone of the American Federal Reserve (Fed ).
“Indexes are poised to drop to year-to-year lows, driven by fear of higher interest rates and, of course, a Fed that may go too far in monetary tightening,” Peter explained. Cardillo, of Spartan Capital.
On the macroeconomic front, the first signs of recession are emerging in the statistics: the decline in economic activity in the euro zone accelerated in September in the private sector, according to the Flash PMI index.
This index shows a “weakening of growth and growing signs of a recession at the end of the year”, according to Marco Valli, director of research at Unicredit bank, underlining “gloomy prospects for the manufacturing sector”.
“An economic recession is looming in the euro zone, as companies in the region have reported a deterioration in the economy as well as an increase in inflationary pressures, linked to a surge in the cost of energy”, commented Chris Williamson, economist from S&P.
The SMI ended down 1.55% 10,137.78 points, with a low of 10,091.87 and a high of 10,322.19 marked at the very start of the session. The SLI fell 2.04% to 1525.87 points and the SPI 1.50% to 13,014.96 points. Of the 30 star stocks, Givaudan (+2.5%) is the only winner of the day.
Vontobel lowered its price target for Givaudan and confirmed “buy”. The analyst assumes that the verniolan flavors and fragrances giant will continue on the growth path taken in recent years, but has factored in a persistent inflationary push in the coming months.
Nestlé (-0.3%), Roche (-0.7%) and Novartis (-0.9%) played their defensive role relatively well.
The Vevey multinational announced Thursday evening the appointment of Lisa Gibby as head of its communications. In this capacity, she will also sit on the general management of the group.
Credit Suisse (-12.4% to 4.07 francs) ended largely red lantern, following marking a historic low at 4.04 francs. AMS Osram (-7.7%) and Swiss Life (-4.9%) complete the trio of biggest losers.
The two-veiled bank was the subject of various speculation on Thursday regarding its strategic reorientation, ranging from a split of its investment bank into three units to a multi-billion capital increase.
Since the start of the year, CS stock has depreciated by almost half. For comparison, the action of the main rival UBS – down 4.4% to 14.57 francs on Friday – lost over the same period less than 10% of its value.
The third bank, Julius Baer (-3.6%), also suffered.
Luxury stocks Swatch (-2.1%) and Richemont (-1.4%) both saw their buy recommendations renewed by Goldman Sachs, which revised upwards its price target for the Geneva financial company and planed the one for the bearer of the Bienne watchmaker. Analysts at the US giant report that demand for luxury goods has proven to be above expectations in recent months.
In the wider market, Huber+Suhner (-2.2%) confirmed its objectives for its Investor Day and considers itself well positioned to take advantage of growth opportunities in its various business sectors.
Swissbilling, a subsidiary of credit card provider Cembra Money Bank (-2.6%), will work with the payment application Twint.
Zur Rose (-7.3%) launched a buyback offer for all debt securities maturing in July 2023, with a total value of 115 million francs and bearing a coupon of 2.50%.
