The Swiss Market Index advanced 1.5 percent on Wednesday to settle at 14,129.93 points, marking the benchmark index's first close above the 14,000-point level in over a month. During the previous session, the index had initially climbed well above that mark before dropping back below it toward the close. Market participants noted that trading conditions remained influenced by a tension between solid corporate earnings and rising risks stemming from elevated interest rates, geopolitical tensions, and demanding artificial intelligence valuations, alongside a renewed attractiveness of bonds relative to equities.
Nestlé shares rose 2.1 percent to 78.89 francs, recovering from an eight-month low of 74.40 francs recorded in the previous week. Lonza emerged as the largest gainer among SMI constituents, climbing 3.4 percent. The life sciences corporation presented more ambitious financial targets during a capital markets day event, capturing analyst attention particularly with its new margin objectives. Lonza aims to lift its core EBITDA margin into the high thirties over the medium term, whereas previous guidance had only pointed to an unspecified margin expansion.
Skincare company Galderma advanced 2.7 percent after acquiring US skincare brand Zo Skin Health for 1.5 billion US dollars, a transaction designed to strengthen its medical skincare business. New analyst assessments also drove movement across the board. Jefferies lowered its rating on reinsurer Swiss Re to underperform and reduced its price target to 110 francs from previous levels, arguing that the market underestimates the accelerating erosion of reinsurance pricing and its impact on the company. Swiss Re shares closed down 0.2 percent at 146.95 francs. Alongside Lonza, Roche, Sandoz, and Novartis recorded gains of 2.8 percent or more, while UBS lost 1.6 percent, ABB fell 1.1 percent, and Partners Group dropped 0.7 percent at the close.
Among non-SMI equities, Bossard gained 3.1 percent after the industrial supplier reported increased third-quarter revenue, with growth accelerating compared to the second quarter. Total revenue surpassed expectations, driven by performance in Asia that exceeded forecasts alongside minimal outperformance in Europe, according to a Zürcher Kantonalbank commentary. Siegfried shares advanced 2.2 percent after Bernstein added the pharmaceutical supplier to its list of ten preferred European small- and mid-cap equities, citing significant upside potential for the Zofingen-based firm. Swisscom rose 1.4 percent following a favorable ruling by the Federal Administrative Court in a fiber-optic dispute, while competitor Sunrise added 0.9 percent. Conversely, Adecco declined 2.2 percent following a downgrade and price target reduction by Kepler, which highlighted growing risks and a marked slowdown in France, the company's largest market, due to political uncertainty and weak economic conditions.
Stronger-than-expected US inflation data exerted a moderate impact on the Swiss market, prompting economists to speculate on potential Federal Reserve interest rate actions. US consumer prices increased 3.7 percent year-on-year in September following a 3.4 percent rise in August, exceeding the 3.6 percent consensus estimate compiled by Reuters. The acceleration was driven largely by higher fuel and heating oil prices linked to conflict-related developments. The higher readings dampened investor appetite for US equities, pressing technology-heavy and rate-sensitive stocks. The Nasdaq 100 declined 0.9 percent to 30,283 points, the S&P 500 fell 0.7 percent to 7,753 points, and the Dow Jones Industrial Average dropped 0.1 percent to 51,623 points.
Financial sector equities remained in focus in the US, where Bank of America shares dropped nearly eight percent after the US Treasury Department imposed penalties exceeding 1.21 billion dollars for anti-money laundering and sanctions violations, including failures to report Chinese money laundering networks. The bank's third-quarter trading revenues across fixed income, currencies, commodities, and equities also lagged expectations. Morgan Stanley shares lost nearly three percent following its quarterly report despite unexpectedly high equity trading revenue, contributing to a weak reporting season for major banks. In contrast, Blackrock shares gained over one percent as the world's largest asset manager reported third-quarter net new asset inflows roughly 20 percent higher than anticipated. Information technology and hardware stocks including HP Inc, Netapp, and Dell Technologies suffered losses of up to eight percent after Barclays downgraded the entire group amid a challenging corporate investment climate.
Oil prices showed little movement on Wednesday, pausing their recent upward trend. Brent crude from the North Sea traded at 106 US dollars per barrel, holding near the previous day's level. Recent geopolitical events and attacks in the Middle East had previously driven Brent up by more than nine percent since the start of the month amid supply disruption concerns. Morgan Stanley analysts noted that while oil exports continue, uncertainty remains high amid infrastructure attacks, leading the bank to raise its Brent price forecasts for the current and upcoming quarters by five US dollars per barrel.
