Switzerland's benchmark SMI fell below 14,000 points for the first time since mid-June, extending a slide that began at the start of the week. As of 11:40, the index was down 1.0% at 13,919 after opening 0.6% lower at 13,979 and trading as low as 13,957 earlier in the session. The SMIM mid-cap index lost 0.7% to 3,064, after giving up 0.5% to 3,071 at the open and 0.6% to 3,066 in the morning. The broad SPI declined 0.9% to 19,666, compared with 19,694 and 19,690 in earlier readings.
European equities were also lower, with traders citing weak overnight US performance, elevated oil prices and renewed inflation and interest-rate concerns. One market participant described a hardening higher-for-longer rate outlook, underscoring the importance of Friday's US inflation data.
Novartis shares slipped 0.7% at midday, after earlier declines of 0.8% and about 1% in early trade, following a sharp one-day drop of about 11% on the previous session. The stock had fallen on disappointing study data for Pelacarsen and Del-Desiran. Analysts remained cautious: Deutsche Bank cut its rating to Hold from Buy, saying the pharmaceutical group had few near-term price drivers.
Logitech led the SMI higher, gaining 1.3% on the launch of a new AI-focused controller for developers. Partners Group added 0.6% and Alcon rose 0.1%, leaving 15 of the 20 blue chips under pressure. ABB and construction names were also among the sellers. Luxury stocks were notably weaker: Richemont fell 3.1% and Swatch dropped 1.6%, after earlier declines of 1.9% and 1.7%, as traders pointed to soft economic and price data from China. Travel retailer Avolta lost 1.8% despite announcing extensions of long-term contracts at four Mexican airports.
In smaller Swiss names, DocMorris jumped 8.6% to a 16-month high, after earlier gaining 7.2% and reversing a premarket decline of 3.5%. The online pharmacy said it plans to issue a new convertible bond of about 100 million Swiss francs, partly to buy back outstanding 2028 convertibles early. ZKB welcomed the associated improvement in operating liquidity. Adecco rose 1.8%, after earlier gaining 2.2%, on price-target increases from Vontobel and Deutsche Bank; Vontobel viewed AI as an opportunity rather than a threat for the staffing business. Bossard gained 1.3% on supportive analyst comments. Barry Callebaut added 2.7%, after earlier rising 1.6%, after CEO Hein Schumacher outlined the company's Focus for Growth strategy at an investor meeting, emphasizing higher-margin businesses and ten core markets. Lindt climbed 2.2% after UBS reiterated a Buy recommendation despite a lower price target.
Medacta fell 3.3% after a disappointing first-half margin trajectory. Bioversys dropped 3.9% and SHL Telemedicine lost 4.2% after half-year results. In the SPI, utilities were the only sector in positive territory, up 0.6%, while cyclical consumption fell 2.0%, industrials lost 1.2% and non-cyclical consumption declined 0.9%.
Oil prices reached $100 a barrel for Brent for the first time since July, driven by escalating conflict in the Middle East. European energy stocks moved near record highs, and the Stoxx oil and gas index rose 0.8%, leaving it about 0.5% below its early-May peak. Defensive utility shares also performed well, while the broader Stoxx 600 lost 0.6%. Next-month European gas futures rose 4%, raising concerns about storage levels in northern Europe.
Retail shares came under pressure, with the sector down 1.5% at a three-month low after Inditex reported second-quarter profit below expectations; shares of the Zara parent fell 3%. In construction, a JPMorgan industry study supported Holcim, which lost 0.5% after earlier slipping 0.4%, and Sika, which gained 0.2%, while Amrize slipped 0.7%, after earlier losing 0.3%, on being placed on a negative catalyst watch list. New Swiss ratings included Berenberg raising Bossard's target to 265 francs from 250 while maintaining Buy, Berenberg lowering R&S's target to 29 francs from 35 with a Buy rating, and Stifel initiating SMG coverage at Buy with a 48-franc target.
