The Swiss stock market continued its upward trend at the start of trading on Friday. The SMI index rose by 0.71% to 14,003.96 points. Among the 20 SMI stocks, 17 were in the green. The Mid-Cap index SMIM gained 0.83% to 3,124.96 points, and the broad SPI index rose by 0.70% to 19,843.41 points.
The slowdown in the global bond sell-off in Asia appears to have eased, but the rapid increase in global bond yields over the past week has raised concerns. The yield on 10-year US Treasury bonds rose by 12 basis points on Thursday and by 28 basis points over two trading days. Rising energy prices have fueled expectations of further interest rate hikes, according to the St. Gallen Cantonal Bank.
The SMI's performance was weighed down by heavyweights, with Nestlé (-0.3%) and Roche (+0.3%) underperforming Novartis (+0.3%). However, UBS (+2%) and ABB (+2%) were among the top gainers. Rumors suggest UBS may be considering a merger with Morgan Stanley to comply with stricter regulatory requirements. ABB's presentation of its data center architecture on Thursday also contributed to its gains.
Other notable gainers included Huber+Suhner (+3.4%), which acquired the Connected-Intelligence business from the UK's Motion Applied. The slight decline in oil prices helped boost the Dax index, which rose by 0.7% to 25,454 points. Diplomatic signals from the Iran conflict provided some relief, said Andreas Lipkow, chief market analyst at CMC Markets.
At the currency market, the Swiss franc continued its decline after the SNB's policy meeting. The euro gained slightly against the franc, trading at 0.9430 francs. The franc also depreciated against the US dollar, trading at 0.8292, down from 0.8282 the previous day.
Several stock ratings and price targets were updated. Vontobel reduced its price target on Amrize to 46 francs from 50 francs, while UBS upgraded Glencore's rating to Buy from Hold with a price target of 650 pence. Octavian lowered its price target on Newron to 15 francs from 17 francs. Research Partners downgraded Stadler Rail's rating to Hold from Buy and raised its price target to 35 francs from 30.60 francs. Oddo raised Temenos' price target to 73 francs from 68 francs. Octavian reduced its price target on Ypsomed to 370 francs from 380 francs.
HelloFresh lowered its annual targets due to weak demand. The company expects revenue to grow by 9-11% instead of the previously forecast 3-6%. The operating profit is now expected to be between 350-370 million euros, down from 375-425 million euros. The news disappointed investors, causing HelloFresh's shares to drop by nearly 7% on Tradegate.
The Swiss Market Index (SMI) is expected to open 0.4% higher, according to IG Bank. Analysts are closely monitoring the SNB's policy decision and oil prices. The KOF is scheduled to release its economic outlook.
In the US, MGM Resorts' stock fell by 8.6% after reports of a withdrawal of Barry Diller's takeover offer. Vaneck Space ETF rose by 4.5%, while the S&P 500 index showed little movement.
Asian markets remained robust despite a global bond sell-off. The Nikkei index in Tokyo rose by 1.2% to 66,318.14 points, and the Topix index gained 1.2% to 4,123.73 points. Trading volumes were low due to holiday closures.
Rising bond yields have dominated investor sentiment, fueling concerns about higher global borrowing costs. In Japan, the yield on 10-year government bonds reached its highest level since 1996. Nigel Green, chief of deVere Group, warned that ignoring the bond markets could be costly. If risk-free US rates exceed 5%, every asset must justify its price. Political attention is on Washington, where US President Donald Trump and Chinese President Xi Jinping met, but there were no breakthroughs on contentious issues like artificial intelligence, trade, or the Iran war.
In Japan, diplomatic talks also moved currency markets. US President Trump expressed concerns about the weakness of the Japanese yen during a summit with Japanese Prime Minister Sanae Takaichi. The Japanese Finance Minister Satsuki Katayama revealed that Takaichi responded that a weak yen is not a problem for Japan.
