FX.co ★ Swiss Market Ends On Firm Note After SNB Rate Cut Announcement

The Swiss market closed positively on Thursday, with investors buoyed by the Swiss National Bank's (SNB) decision to reduce the interest rate. The benchmark SMI concluded with an 85.03 points increase, or 0.73%, concluding at 11,703.66, after peaking at 11,779.24 during early trading.

The SNB became the initial central bank to relax its policy in this cycle, given that the two-and-a-half-year battle against inflation has yielded successful results. Unexpectedly, the bank lowered the policy rate by 25 basis points to 1.5% and confirmed its readiness to engage in the foreign exchange market as needed.

Speaking on this matter, SNB President Thomas Jordan explained that the decision addresses the significantly diminished inflation concern and the appreciation of the Swiss franc in real terms over the past year. The rate cut will stimulate economic activity, with today's easing confirming that monetary conditions remain suitable.

The bank aims to closely monitor inflation developments and undertake necessary further adjustments to its policy to sustain inflation within the range that aligns with medium-term price stability.

Moreover, the SNB revised the inflation outlook downwards from 1.9% to 1.4% for 2024 and 1.2% from 1.6% for 2025. The projected inflation rate for 2026 is set at 1.1%.

SMI's leading gainer, Partners Group, increased by 4.3%. Sonova and Lonza Group both rose by over 2.6%, while UBS Group advanced by almost 2.25%. Other notable companies such as Sika, Novartis, Holcim, ABB, and Kuehne & Nagel experienced increases from 1.6 to 2%. Meanwhile, Alcon and Swiss Life Holding concluded on a high note.

On the downside, Roche Holding decreased by 2.5%, and Zurich Insurance Group dropped approximately 0.5%.

Among the Mid Price Index, Meyer Burger Tech skyrocketed almost 17%, while ams OSRAM AG and VAT Group experienced significant gains of 7.1% and 6.2% respectively. Julius Baer improved by around 4.4%, and companies like SIG Group, Straumann Holding, Clariant, Temenos Group, Swatch Group, SGS, Belimo Holding, Ems Chemie Holding, PSP Swiss Property, and Adecco experienced growth ranging between 1.5 to 3.6%.

However, Helvetia declined by approximately 4.65%, Sandoz, BKW, and Schindler Holding saw decreases, shedding between 2.4%, 1.33%, and 1.25% respectively.