The Swiss Market Index (SMI) held its gains on Wednesday, closing at 14,028.96 points—a 0.4% increase after opening with a 0.1% gain. UBS led the index with a 1.0% rise, benefiting from its post-Ständerat capital debate momentum, though it later dipped before recovering. The SMI’s performance follows a narrow escape from the 14,000-point psychological barrier on Tuesday, which it closed just below. Eight of the 20 SMI constituents advanced, while losses were recorded by Sika (-0.8%) and Swiss Life (-0.7%).
Regulatory tensions persisted as the Ständerat debated UBS’s proposed capital requirements, which would mandate 90% CET1 capital for its foreign subsidiaries—a stricter rule than the 50% CET1/50% AT1 hybrid favored by the bank. AT1 instruments are cheaper than CET1, and UBS opposed the measure, arguing it would increase costs. The decision will proceed to the Nationalrat, where further debate is expected.
Analyst revisions highlighted outperformance for Roche (+0.5%), driven by positive Phase-II study data for Sefaxersen and a potential board reshuffle with Christophe Weber’s appointment. Sonova (+0.7%) and Straumann (+0.7%) also saw upgrades from Bernstein SG, while ABB’s target was raised to 89 CHF by ODDO BHF. Galderma (+0.7%) gained as it presented 19 abstracts at the EADV conference, focusing on Nemolizumab for dermatological conditions.
Tech stocks outperformed, with VAT (+1.8%) and AMS Osram (+7.0%) reaching new highs on Nasdaq support. Goldman Sachs raised its target for VAT, while Jefferies boosted AMS’s outlook. Meanwhile, German auto parts firms Bosch, Autoneum (-0.5%), and Feintool faced mixed signals ahead of Bosch’s earnings, and DocMorris (-0.5%) was impacted by a German court ruling on its dm-med subsidiary.
Outside Switzerland, the Dow Jones remained in losses while the Nasdaq surged, reflecting strong KI-driven gains in Asia. The MSCI Asia ex-Japan index rose 0.7% for the sixth consecutive day, though Chinese markets declined 0.3% and 0.4% in Shanghai/Shenzhen. Japanese futures hit 66,745 points, near Friday’s close, amid expectations of a strong rebound. South Korea’s KOSPI rose 1.2%, led by Samsung (+2.1%) and SK Hynix (+2.3%), while Taiwan’s TWSE advanced 0.9% toward record highs.
Forwards, the US dollar strengthened 0.2% to 157.62 yen and 6.7044 yuan, reflecting Fed hawkishness. The euro held steady at 1.1435 USD. Oil prices fell 0.3% for Brent (98.97 USD/barrel) and 0.7% for WTI (89.90 USD/barrel), amid Saudi Arabia’s pipeline restart and Trump-Iran talks progress.
Asian markets showed mixed results, with KI-driven tech stocks leading gains in Japan and South Korea. Meanwhile, US-China tensions remained a focal point, with President Trump and Xi Jinping scheduled for talks, though expectations for breakthroughs were low. The US Federal Reserve’s hawkish stance also supported the dollar, while Brent and WTI oil prices declined on supply concerns.
Swiss analysts at Julius Bär forecasted the SMI to open 0.4% higher, with gains across most constituents. Roche was expected to rise 1.1% on pre-market data, while UBS opened 0.2% higher ahead of the Ständerat vote. Midcap AMS Osram (+1.7%) was the top pre-market performer, while DocMorris (-0.4%) was the only loser.
The broader macro backdrop remained uncertain, with geopolitical tensions—including US-Iran negotiations and potential US-China trade deal outcomes—keeping markets on edge. The SMI’s resilience contrasted with broader global volatility, as the Nasdaq extended gains and Asian markets diverged between KI-driven tech strength and Chinese market weakness.
