FX.co ★ Swiss Market Ends Weak After Hot Inflation Data

Swiss stocks started the day with a modest positive tilt, but ended the day lower due to unexpected inflation data and a decline in retail sales. The SMI benchmark, having initially risen to 11,301.35, retreated to 11,188.72 by the late afternoon, closing the day 51.28 points, or 0.46%, lower at 11,209.63.

According to the Federal Statistical Office, Switzerland's consumer price inflation rose higher than expected in April to a four-month peak. The Consumer Price Index (CPI) increased 1.4% year-on-year in April, up from a 1% rise in March. Economists had predicted a slight increase to 1.1%. Despite this, inflation remained within the central bank's 0-2% target range. On a monthly basis, consumer prices rose 0.3% in April, having remained stable in March.

Conversely, retail sales dropped by 0.1% year-on-year in March, conversely with a 0.2% gain seen in the previous month. Sales of both non-food and food products fell by 0.6% in March compared to the previous year. Monthly retail sales dropped 0.4% in March, a stark contrast to the 0.1% increase seen in February.

In the stock market, several notable shifts occurred. The VAT Group rallied nearly 5% whilst Straumann Holding fell 4.07%. Others, such as Roche Holding and Swisscom, ended the day down by 2.95% and nearly 2% respectively. Swiss Life Holding, Zurich Insurance Group, Swiss Re, Partners Group, Schindler Holding and Sandoz also experienced losses from between 0.5 to 1.1%.

On the other hand, Logitech International saw a 3.5% gain, Julius Baer climbed 2.76%, and Sonova advanced by around 1.8%. SIG Group, Lonza Group, Holcim, and Kuehne & Nagel also saw gains ranging from 0.5 to 0.8%.

Novartis ended slightly down by 0.2% even though it announced its agreement to acquire U.S.-based biotech company Mariana Oncology. This acquisition will be met with an upfront payment of $1 billion and further payments of $750 million contingent on pre-agreed milestones.