Swiss shares extended their losses on Wednesday as elevated oil prices and weaker US cues weighed on risk appetite. The Swiss Market Index fell 0.6% to 13,979 points, while the broader SMIM declined 0.5% to 3,071 points. Novartis was again in focus after an 11% drop on Tuesday following setbacks in clinical studies; the shares were down about 1% in early trade. Deutsche Bank had cut the stock to Hold from Buy.
New ratings added to the tape. Berenberg raised its Bossard target to 265 francs from 250 while maintaining Buy, and cut its R&S target to 29 francs from 35 while keeping Buy. Stifel began coverage of SMG with a Buy rating and a 48-franc target. In construction stocks, a JPMorgan industry study supported Holcim, down 0.4%, and Sika, up 0.2%, while Amrize, down 0.3%, was placed on a Negative Catalyst Watch list.
DocMorris, the mail-order pharmacy, was a notable laggard, down 3.5% in premarket trade after saying it would issue a new convertible bond of about 100 million francs. Against the broader decline, Adecco rose 2% and Barry Callebaut gained 2.2% after a target adjustment and a comment from its chief executive at an investor day. In premarket indications, Julius Bär had the SMI 0.4% lower at 14,005 points, with 19 of 20 SMI shares lower and only Novartis higher at 0.1%. Amrize, UBS and Richemont were the biggest SMI losers, down 1.2%, 0.7% and 0.5% respectively. The broader market was seen down about 0.3%, with DocMorris, Bachem and Barry Callebaut showing the largest moves at -3.5%, +0.7% and +0.6%.
Barry Callebaut chief executive Hein Schumacher sounded calmer about cocoa markets and El Nino risk at the Barclays Global Consumer Staples Conference, analysts said. They described his tone as sharply different from investor concerns, noting he said market reactions had become too sensitive after the cocoa crisis and that the industry was entering a second consecutive year of cocoa surplus. Schumacher also saw no sign that cocoa price volatility would push chocolate retail inflation higher.
European futures pointed lower, with the Stoxx 600 seen down 0.4% and the Dax down 0.5%. IG Bank had the SMI 0.8% lower at 13,982.5 points. Attention in the US turned to ADP labor-market data and a 10-year Treasury auction. In Switzerland, Bioversys and Medacta were due to report half-year results, while Richemont was set to hold a general meeting.
Asian markets remained resilient despite escalating Middle East tensions. Japan's Nikkei 225 rose 0.4% to 65,495.23 and the Topix gained 0.3% to 4,063.61, helped by enthusiasm for artificial intelligence and a billion-scale fiber-optic deal between Verizon and Corning that lifted Japanese cable makers. Nomura Securities strategist Maki Sawada said semiconductor and AI-related stocks were developing strongly and contributing positively to the Nikkei. Furukawa Electric was among the biggest winners, up 13.2%, while Kyowa Kirin and Sumitomo Pharma fell about 5%.
In China, the Shanghai index rose 0.3% to 3,953.13 and the Shanghai-Shenzhen index of major companies gained 0.3% to 4,571.03. Houthi attacks on Saudi Arabia and US strikes on Iranian oil tankers had raised energy costs, helping push August producer prices up 3.8% and consumer prices up 0.8%, according to Dong Lijuan of China's National Bureau of Statistics. She said higher international oil and nonferrous metal prices had lifted prices in the relevant sectors, while weak domestic demand limited broader inflation.
In Asian currency trade, the yen benefited from speculation about near-term rate hikes by Japan's central bank. The dollar fell 0.3% to 153.55 yen, rose slightly to 6.7083 yuan and edged up to 0.8093 Swiss francs. The euro was little changed at 1.1628 dollars and 0.9410 francs ahead of the European Central Bank's rate decision.
Commodity markets reflected supply worries from the military escalation involving the United States, Iran and allied groups. ING analysts said the latest developments reinforced their view that a resumption of peace talks was still far away. North Sea Brent crude rose 1.5% to $99.40 a barrel (159 liters), while WTI gained 1.4% to $94.35.
On Wall Street Tuesday, after an extended weekend, the Dow Jones Industrial Average fell 1.18% to 52,786.07 and the S&P 500 declined 0.58% to 7,673.52 as rising oil prices fed inflation and interest-rate concerns. The Nasdaq 100 was down only 0.12% at 29,507.70, as declines in Apple, Nvidia and Microsoft were offset by gains in AI-linked stocks. A market participant said risk appetite remained subdued ahead of the ECB decision on Thursday and US inflation data on Friday, with uncertainty also tied to Middle East tensions and reports of explosions on an Iranian oil-export island. Chip stocks extended Friday's gains, which traders linked to OpenAI's announcement of a more powerful AI model, with AMD and ARM among the beneficiaries.
