Equities Switzerland just held their ground – ECB with large rate hike

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ZURICH (Dow Jones) — The Swiss stock market ended trading on Thursday with slight losses. The focus was on the interest rate decision by the European Central Bank (ECB). The key interest rate was raised by 75 basis points. At the same time, further rate hikes were signaled in the future. In addition, the ECB presented new projections and significantly increased its inflation forecasts while lowering its growth forecasts for the next two years. Analysts praised the rate hike. The ECB is finally taking inflation seriously, said Martin Moryson, DWS chief economist for Europe.

In the USA, US Federal Reserve Chairman Jerome Powell also spoke in a simultaneous speech and once again emphasized the importance of fighting inflation. “I can assure you that my colleagues and I are very committed to this and we will continue to do so until the job is done,” the Fed chairman said. The Federal Reserve has already taken two major rate hikes of 75 basis points in the current interest rate cycle.

The SMI fell by 0.1 percent to 10,790 points. In the 20 SMI stocks, there were 12 price winners and 8 losers. 30.2 (previously: 25.98) million shares were traded.

Bank stocks in particular were sought after. They are “the winners of the hour,” said IG’s Salah-Eddine Bouhmidi, referring to the increase in the ECB’s key interest rate to 1.25 percent. CS Group and UBS shares were up 1.3 and 1.9 percent, respectively. The papers of the insurers were also sought – here it was up to 2.3 percent for Swiss Re and Swiss Life. There were also positive statements from Fitch. The weak economy is unlikely to affect demand for reinsurance. The rating agency confirmed its outlook for the sector as “neutral”, as announced in the run-up to the industry meeting in Monte Carlo next weekend. Fitch expects the sector’s profitability to remain stable in 2022 and 2023.

The daily losers in the SMI were the Richemont shares with a discount of 2.9 percent to CHF 103.90. Bernstein analysts lowered the rating from “Outperform” to “Marketperform” and lowered the price target to CHF 123. The sale of struggling e-commerce business Yoox-Net-A-Porter may have been the last driver of the stock price for some time, analysts said. At the same time, prospects are beginning to cloud over.

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(END) Dow Jones Newswires

September 08, 2022 11:45 ET (15:45 GMT)