The Swiss stock market showed resilience on Friday, with the SMI index gaining 0.68%. The index closed at 14,003.96 points, with 17 of the 20 SMI components in positive territory. The Mid-Cap SMI index rose 0.83% to 3,124.96 points, and the broad SPI index increased 0.70% to 19,843.41 points.
Nestlé's shares, however, declined 0.5% on Friday, marking a 1.2% drop since the start of the year. The company's performance contrasts with the broader market's gains, with Novartis and Roche also rising 0.3%.
The UBS and ABB shares saw significant gains, with both companies reporting increases of over 2%. Speculation about a potential merger between UBS and Morgan Stanley to comply with stricter Swiss banking regulations has fueled interest in UBS. ABB's shares benefited from its recently unveiled data center architecture.
Huber+Suhner also performed well, rising 3.4%, as the company acquired the Connected-Intelligence business from the British firm Motion Applied.
The German DAX index gained 0.7% to 25,454 points, supported by a slight decline in oil prices. Diplomatic signals from the Iran conflict provided some relief, according to Andreas Lipkow, Chief Market Analyst at CMC Markets. The easing of inflation concerns, driven by lower oil prices, has reduced pressure on bond yields.
Among the DAX's top gainers were Siemens Energy and the Deutsche Bank, which both rose over 2%. Airbus, on the other hand, fell 1.6%, following the disclosure of a quality issue with its A321neo aircraft, though the company assured that it does not pose a safety risk.
Several Swiss companies saw changes in their ratings and price targets. Vontobel reduced its price target for Amrize to 46 Swiss francs, while UBS upgraded its rating for Glencore to Buy with a price target of 650 pence. Octavian lowered its price target for Newron to 15 Swiss francs, and Research Partners reduced its rating for Stadler Rail to Hold while increasing its price target to 35 Swiss francs. Temenos saw its price target raised to 73 Swiss francs by Oddo, and Ypsomed's price target was reduced to 370 Swiss francs by Octavian.
The Swiss franc continued its decline against the euro and the US dollar. The euro was trading at 0.9430 Swiss francs, down from 0.9420 Swiss francs the previous day. The Swiss franc was also trading at 0.8292 against the US dollar, down from 0.8282.
The Swiss Market Index (SMI) is expected to open higher at the IG Bank, supported by positive developments from overseas. Market analysts are closely monitoring the interest rate developments and oil prices.
HelloFresh reduced its annual targets due to unexpectedly low demand. The company expects revenue to grow by 9-11% instead of the previously forecasted 3-6%. The operational profit is also expected to decrease to 350-370 million euros from the previous estimate of 375-425 million euros. The stock price fell 7% on the Tradegate platform.
The US stock market saw a significant decline in MGM Resorts' stock price, dropping 8.6% after reports of the withdrawal of Barry Diller's takeover offer. Conversely, the Vaneck Space ETF gained 4.5%, standing out in a relatively quiet post-market trading session.
Asian markets remained robust despite a global sell-off in bond markets. The Nikkei index in Tokyo rose 1.2% to 66,318.14 points, and the Topix index increased 1.2% to 4,123.73 points. Trading volumes were low due to holiday closures, with no trading activity in Shanghai.
Investor sentiment was largely influenced by rising bond yields, which fueled concerns about higher global credit costs. The 10-year Japanese government bond yield reached its highest level since 1996. Nigel Green, Chief of deVere Group, warned that ignoring the rising bond yields could be costly. He noted that once risk-free rates in the US exceed 5%, every asset class will need to justify its price.
Political attention remained focused on Washington, where Chinese President Xi Jinping and US President Donald Trump held discussions. However, there were no significant breakthroughs on contentious issues such as artificial intelligence, trade, or the Iran war, which kept Chinese markets in a state of uncertainty ahead of the holidays.
Diplomatic talks in Japan also had an impact on currency markets.
