Swiss Market Ends Sharply Lower

(RTTNews) - Swiss stocks tumbled on Thursday, mirroring the trend seen across global markets, following deepening crisis in the Middle East following missile strikes at critical energy infrastructure in the region.

Rising oil prices amid potential supply disruptions triggered inflation concerns. Hawkish tones by major central banks added to market's woes. After Federal Reserve's move to hold rates, the Swiss National Bank, the European Central Bank and the Bank of England also decided to leave their interest rates unchanged.

The benchmark SMI, which languished in negative territory right through the day, ended with a loss of 305.94 points or 2.4% at 12,459.54, the session's low.

Sika ended more than 6.5% down. Straumann Holding closed nearly 5% down, and Richemont drifted down 4.52%.

Geberit, Julius Baer and Amrize closed lower by a little over 4%. Holcim, Partners Group, Roche Holding, SGS, Givaudan, Schindler Ps, Sonova, ABB, VAT Group, Helvetia Baloise Holding, Novartis, UBS Group, Sandoz Group, Swiss Re and Lindt & Spruengli lost 2%-3.4%.

The Swiss National Bank decided to hold its benchmark rate and signaled increased willingness to intervene in the foreign exchange market to counter the excessive appreciation of currency amid the conflict in the Middle East.

The central bank left its policy rate at zero percent on Thursday, in line with market expectations.

The SNB had reduced the key rate by 175 basis points since March 2024. The bank exited its negative rate in 2022 after holding it for over seven years.

"Given the conflict in the Middle East, the SNB's willingness to intervene in the foreign exchange market has increased," the bank said. The SNB said it counters a rapid and excessive appreciation of the Swiss franc, which would jeopardise price stability in the domestic economy.

The bank lifted its inflation forecast for 2026 to 0.5% from 0.3% but lowered the estimate for 2027 to 0.5% from 0.6%.

Policymakers observed that the economic outlook has become considerably more uncertain with the conflict in the Middle East. Economic growth could be rather subdued with a certain upturn to be expected in the medium term, the bank noted.

GDP growth is projected at around 1% this year, unchanged from the prior outlook. This will be followed by around 1.5% growth in 2027, the bank said.