The Swiss Market Index (SMI) slipped 0.1% to 14,407.26 points on Monday, weighed down by losses in heavyweights Roche and ABB, which fell 0.6% and 0.5% respectively. Kühne+Nagel bucked the trend with a 1.4% gain, followed by Amrize and Swisscom at 0.6% each. Defensive stocks such as Novartis and Nestlé provided marginal support, rising 0.2% and 0.3%.
Brent crude oil prices climbed 3.3% to $90.98 per barrel after U.S. military strikes on Iranian targets, compounding concerns over supply disruptions. Analysts at DBS expect the conflict to remain contained but note that negotiations to reopen the Strait of Hormuz have likely stalled, keeping oil prices anchored between $85 and $95 for the foreseeable future.
UBS adjusted price targets for Swiss equities, raising Barry Callebaut’s target to CHF 1,180 from CHF 1,100 while maintaining a Neutral rating, and lifting Gurit’s target to CHF 49 from CHF 43 with a Buy rating. Conversely, Research Partners cut Kudelski’s target to CHF 1.05 from CHF 1.37, maintaining a Hold rating, while Octavian reduced Orior’s target to CHF 16.60 from CHF 19 with a Hold rating unchanged. Zürcher Kantonalbank (ZKB) set SoftwareOne’s fair value at CHF 14.00, retaining a Neutral rating.
The Swiss equity market opened flat ahead of the final August trading session, with rising U.S. rate expectations and higher oil prices cited as headwinds. However, defensive positioning in Swiss equities provided underlying support. Traders pointed to last week’s Jackson Hole symposium, where new Federal Reserve Chair Kevin Warsh signaled a higher likelihood of a September rate hike, as a lingering market driver.
Geopolitical tensions in the Middle East escalated further as U.S. forces struck Iranian targets for the first time since late July, prompting retaliatory measures. The Brent crude price briefly exceeded $90 per barrel in response. The SMI’s broader SPI and mid-cap SMIM indices declined 0.05% and 0.28% to 20,259.51 and 3,325.22 points respectively.
Among SMI components, 11 of 20 blue chips ended lower, with Roche (-0.7%) and Logitech (-1.0%) among the weakest performers. UBS slipped 0.3% ahead of a parliamentary committee review of its future regulatory framework. Kühne+Nagel (+1.1%) and Richemont (+0.5%) were notable gainers, with the latter supported by stronger-than-expected Chinese economic data.
Asian equities fell at the start of the week, with Japan’s Nikkei 225 dropping 1.6% to 65,361.60 and China’s CSI 300 declining 1.0% to 4,564.76. In Japan, remarks by Fed Chair Warsh reinforced expectations for tighter U.S. monetary policy, while markets priced in a near-certain Bank of Japan rate hike next month. In China, factory activity improved marginally to 49.8 in August but remained in contraction territory, and escalating U.S.-Iran tensions added to growth concerns.
The U.S. dollar held steady against the Swiss franc at 0.8093, while the euro traded at 1.1590 versus the dollar and 0.9381 against the franc. Thin summer liquidity in U.S. markets, with volumes at three-year lows, increased the potential for outsized price moves amid limited trading activity.
