Swiss Market Index holds gains amid Fed hike, UBS gains amid Ständerat vote

The Swiss Market Index (SMI) held onto gains on Thursday, continuing its positive trajectory this week as investors digested the Federal Reserve’s 25 basis-point rate hike and the Ständerat’s decision on stricter capital requirements for Swiss banks with foreign exposures. The SMI rose by 0.27% to 13,906.75 points by 11:30 local time, while its mid-cap counterpart, the SMIM, climbed 0.96% to 3,049.40 points, and the broader SPI advanced 0.37% to 19,630.16 points. ABB led gains in the SMI with a 1.3% rise, followed by Logitech (+1.2%), UBS (+1.2%), and Novartis. UBS’ shares surged after the Ständerat approved further scrutiny of its capital adequacy rules following the CS debacle, though the bank’s own shares only advanced modestly by 0.2% amid the vote’s uncertainty. Meanwhile, the Dax and EuroStoxx 50 also rose by 0.7%, reflecting broader European market optimism amid the Fed’s hawkish stance and softer energy prices. Brent crude fell 1.04% to $104.21 per barrel and WTI by 1.09% to $101.07 per barrel, partly due to Saudi Arabia’s announcement of alternative export routes and a Trump administration signal of potential Iran conflict de-escalation. Oil prices had earlier surged to their highest in four months amid escalating tensions in the Middle East, but the news eased market stress and contributed to a slight easing in inflation concerns. Energy price declines also supported risk assets, with US futures on the S&P 500 and Nasdaq recovering 0.7% overnight, reversing some of the losses from the Fed’s rate decision. The IG Bank indicated the SMI would open 0.5% higher, while analysts’ forecasts remained mixed on the day’s trading dynamics. The SMI’s 17-of-20 positive performance underscored broad market resilience, though Roche (-0.8%) and Alcon (-0.3%) were notable underperformers, with Roche’s shares failing to sustain gains from earlier positive study results. Roche’s -0.7% decline by midday reflected analysts’ view that pre-existing market positioning limited follow-through. Meanwhile, UBS’ capital rules vote provided a brief tailwind for its shares, though the bank’s broader market positioning remained unchanged. In the mid-cap sector, Helvetia Baloise (+3.6%) and Swissquote (+1.1%) led gains after reporting half-year results that exceeded expectations, with Helvetia Baloise’s synergies proving particularly strong. In contrast, Rieter (-12%) and Ypsomed (-1.7%) underperformed after UBS downgraded their ratings to sell from hold, while Medacta (-1.4%) and Amrize (-0.3%) also declined. The Ständerat’s decision to examine stricter capital rules for foreign-exposed banks—including UBS—added volatility, with the bank’s shares rising only 0.2% despite the vote’s significance. The broader market’s focus remained on the Fed’s hawkish stance and the impact of Saudi Arabia’s oil export diversifications, which helped temper inflation expectations and supported risk assets. The Dax opened higher on Thursday, continuing its upward trend from the previous day, while the MDax for mid-sized German companies also rose modestly by 0.1%.