FX.co ★ Swiss Market Ends Modestly Higher After Choppy Session

The Switzerland market concluded positively on Monday, owing to the alleviation of worries regarding inflation and the future of interest rates. Reduced fears of an escalated Middle East conflict also contributed to this positive shift in risk sentiment.

Despite spending most of the day's session in negative territory, the benchmark SMI ended with a modest increase of 31.37 points or 0.28% at 11,327.77. Throughout the session, the index hit a low of 11,256.40 and a high of 11,338.97.

Top performers among the SMI components included Kuehne & Nagel, which saw a 2.29% increase. Novartis and Sonova achieved 2.14% gains each. Roche Holding and Swiss Re also ended the day on a high, with increases of 1.67% and 1.2% respectively.

Other gainers included Alcon, Lonza Group, Swiss Life Holding, Zurich Insurance Group, and Sika, which saw increases of between 0.6% and 1%.

On the other hand, Nestle, ABB, and UBS group saw their shares sink by 1.47%, 1.25%, and 1.21% respectively. Partners Group experienced a 0.67% loss.

In the Mid Price Index, Sandoz was the top performer with a 5.12% increase after UBS elevated the stock's rating. UBS analysts say that better-than-expected market share is anticipated due to the successful reach of drug adalimumab by the Swiss pharmaceutical company.

Baloise Holding witnessed approximately a 3.4% surge, and Ems Chemie Holding advanced close to 2%. Other gainers included Helvetia, Adecco, Avolta, and Straumann Holding, each gaining between 1.5% and 1.7%.

Swatch Group, Clariant, Galenica Sante and Barry Callebaut also ended notably higher. In contrast, Tecan Group faced a decrease of 3.18%, VAT Group declined by 2.1%, and Temenos Group concluded with shares 1.52% lower. Lindt & Spruengli and BKW encountered decreases of 1.34% and 1.13%.

In a notable financial policy decision, the Swiss National Bank raised the minimum reserve requirement for domestic banks, causing a reduction in its payout. The minimum reserve ratio was revised from 2.5% to 4%.

The Swiss National Bank stated that liabilities deriving from cancelable customer deposits will be included in the calculation of the minimum reserve requirement. These changes will be effective from July 1.

In an unanticipated move last month, the Swiss central bank lowered its benchmark rate and became the first major central bank to relax the policy. The interest rate was reduced by 25 basis points and currently stands at 1.5%.