The Swiss Market Index (SMI) opened little changed on Thursday as Nestlé’s 0.67% decline offset modest gains across the broader index. Swatch shares fell 2.3%, pressuring the consumer sector amid ongoing weak sentiment. The Swiss franc strengthened to 0.9392 per euro and 0.8092 per dollar following August inflation data, which rose to 0.8% year-on-year from 0.4% in July, exceeding economist forecasts of 0.5-0.6%.
The franc’s appreciation followed the release of Swiss consumer price data by the Federal Statistical Office, marking the highest inflation rate in two years. The unexpected increase in price pressures comes as global oil markets remain volatile, with Brent crude settling at $94.26 per barrel, down 1.5% from Wednesday but still up more than 5% since Monday amid renewed geopolitical tensions in the Middle East.
Analysts at Julius Bär and IG Bank both projected the SMI to open marginally higher, with all 20 index constituents showing slight gains. Logitech led advancers with a 0.95% rise, while Roche advanced 0.7% after announcing an exclusive licensing agreement with China’s Simcere Pharmaceutical for the development of the trispecific antibody SIM0660. Partners Group gained 0.3% following mixed analyst actions, including Morgan Stanley’s reinstatement of coverage with an equal-weight rating and a target of 775 francs, and Kepler Cheuvreux’s downgrade to 815 francs from 860 francs, maintaining a buy rating.
Swatch shares extended losses after Kepler Cheuvreux reduced its target to 253 francs from 268 francs, maintaining a hold rating. Kardex also faced a downgrade from Research Partners, which cut its target to 253 francs from 268 francs while maintaining a hold rating. The broader market showed limited directional momentum, with Sika and Holcim making operational updates unrelated to valuation: Sika completed its acquisition of Turkish adhesives manufacturer Akkim, and Holcim inaugurated a new calcined clay production line in the Czech Republic.
Oil prices pulled back from midweek highs, with Brent crude trading at $94.26 per barrel for November delivery, down from a session peak of $97. Swap markets priced a 66% probability of a 25-basis-point Federal Reserve rate hike at the upcoming meeting, up from 37% a week prior, according to CME Group’s FedWatch tool. Fed Governor Christopher Waller’s remarks and Friday’s U.S. nonfarm payrolls report are expected to shape expectations for further monetary tightening.
In Asia, equities showed mixed performance. Japan’s Nikkei 225 rose 0.2% to 64,455.83, while the broader Topix gained 1.0% to 4,124.08. Fast Retailing and Inpex led decliners, while Nitori Holdings and Mitsubishi Motors posted the largest gains. The Shanghai Composite added 0.5% to 3,960.44, and the Shenzhen Component Index rose 0.5% to 4,572.22. The dollar weakened 0.4% against the yen to 158.11 and strengthened slightly to 6.7179 yuan, while the euro held near $1.1590 and advanced to 0.9414 francs.
Market focus remains on U.S. labor market data and central bank communications, with traders weighing the potential for further tightening against signs of economic resilience. The Dow Jones Industrial Average rose 0.56% to 53,061.95, ending a three-day losing streak, while the S&P 500 gained 0.46% to 7,666.60 and the Nasdaq 100 added 0.23% to 29,143.33.
