Markets Swiss stock market dives after Fed interest rate statements
The Swiss stock market suffered a severe setback on Thursday and lost a lot of ground. The leading SMI index fell to its lowest level for months.
19.12.2024, 10:15
19.12.2024, 20:55
SDA
The weakness was triggered by the US Federal Reserve. Although the Fed had cut interest rates by 25 basis points the previous evening, as expected, the Fed members only expect two further rate cuts next year rather than four due to the continuing relatively good economy and stubborn inflation.
This shocked the markets in the USA on Wednesday evening and also dragged the European stock markets deep into the red the following morning. "Fed Chairman Jerome Powell's statements after the interest rate decision caught the stock market completely on the wrong foot," said one trader.
Lower than it has been for months
The leading SMI index closed 1.93 percent lower at 11,414.84 points, off a daily low of 11,388 points. The market thus fell well below the low recorded at the beginning of August and is now trading at its lowest level since the beginning of May. Compared to its high at the end of August, the SMI has fallen by more than 1,000 points, meaning that the annual gain has melted away to just 2.5 percent.
Technology and cyclically sensitive stocks, financials and equities, which have recently made strong gains, were particularly under pressure due to the new interest rate fears. Meanwhile, corporate news played a rather subordinate role.
The biggest losses among the 30 blue chips were recorded by ABB (-5.4%), VAT (-5.1%) and Partners Group (-4.3%). Straumann, UBS and Roche GS also recorded losses of between 3 and 4 percent.
Only a few winners
Among the few winners were Lindt PS (+0.3%), Nestlé (+0.1%) and Swiss Life (+0.1%). Kühne+Nagel also held up reasonably well (unchanged). Kühne and Nestlé are by far the weakest SMI stocks this year.
SoftwareOne (+7.0%) was one of the laggards. The software vendor wants to buy the Norwegian IT consultant Crayon Group for over CHF 1 billion.
Technology stocks such as Comet (-11%), U-blox (-4.8%), Ams Osram (-4.3%) and Inficon (-1.9%) suffered from the weak environment for these types of shares. The three smaller stocks Wisekey, GAM and Swiss Steel also suffered double-digit losses.
