Swiss equities extended their weekly gains on Thursday, with the Swiss Market Index (SMI) rising 0.2% to 13,906.75 points as of mid-morning, while the Mid-Cap SMIM climbed 0.96% to 3,049.40 and the broad SPI advanced 0.37% to 19,630.16.
The relief followed the US Federal Reserve's expected 25-basis-point interest-rate increase on Wednesday, which was implemented with notable unanimity — a factor that calmed investors wary of further inflationary pressures. Andreas Lipkow, chief analyst at broker CMC Markets, said the Fed's resolve in combating inflation was reassuring, but warned that prolonged elevated inflation would force the central bank to maintain restrictive monetary policy longer, increasing risks to the economic outlook.
European indices mirrored the sentiment: Germany's DAX rose 0.7% to 25,705 points, the EuroStoxx 50 gained 0.7%, and the MDax edged up 0.1% to 31,315.
In Switzerland, ABB led the SMI with a 1.3% advance, followed by Logitech, Novartis and UBS, each climbing up to 1.2%. UBS shares, which rose 0.8%, benefited from a procedural development in the Ständerat, where councilor Andrea Caroni withdrew his proposal to hand capital-regulation decisions to the federal executive. The chamber voted to take up the issue directly, marking a partial win for the bank ahead of its deliberations on new capital rules for systemically important banks with foreign holdings.
Pharma giant Roche, however, gave back earlier gains, falling 0.7% despite positive clinical trial data released that morning. Analysts rated the results as only marginally influential since the drug already holds marketing authorization. Alcon, Givaudan and Swisscom also drifted lower, posting declines between 0.2% and 1.0%.
Among mid-cap names, Helvetia Baloise surged 3.9%, having reported half-year results that Vontobel judged well above market expectations, with strong synergy capture from the merged group. Sandoz gained 1.7% and Galderma added 0.8%; both stocks will be included in the SMI next week.
Downgrades weighed on several industrials and med-tech firms. UBS pulled the reins on Rieter, cutting its rating to Sell from Hold with aCHF 2.00 target, sending the stock sliding as much as 16% in early trading before moderating to an 8.6% loss. At Ypsomed, Stifel lowered its rating to Hold from Buy with a CHF 380 target, while Research Partners cut its Avolta price target to CHF 137.70 from CHF 151, maintaining a Hold. Conversely, Octavian upgraded Schindler's participation notes to Buy from Hold and raised its target to CHF 320 from CHF 310.
On the commodities front, Brent and WTI crude both edged lower as Saudi Arabia's announcement that it would begin exporting oil via Oman eased some pressure from the crude market and, in the short term, from the inflation debate.
Futures on US stock-index contracts pointed higher into the opening bell, reinforcing the optimistic tone across Atlantic markets.
