Swiss shares fell on Wednesday as the Swiss Market Index slipped below 14,000 for the first time since mid-June. In the latest update, the SMI traded at 13,957 points, after earlier falling 0.6% to 13,979. Pre-open indications had ranged from 14,005 at Julius Baer, a 0.4% lower indication where 19 of 20 SMI constituents were lower and only Novartis was higher by 0.1%, to 13,982.5 at IG Bank, a 0.8% decline. The SMIM index fell 0.6% to 3,066, after earlier dropping 0.5% to 3,071, while the SPI lost 0.8% to 19,694.
Traders cited weak US cues, elevated energy prices and related rate and inflation concerns. Novartis shares fell 0.8%, failing to recover after an 11% decline the previous day on setbacks in clinical studies. Deutsche Bank cut the stock to Hold from Buy. Luxury names were also under pressure: Richemont fell 1.9% and Swatch 1.7%, with dealers pointing to recent Chinese economic and price data.
In construction-related shares, a JPMorgan industry study provided direction. Holcim fell 0.5% and Sika rose 0.2%, both outperforming the broader market and seen as favorites by traders. Amrize declined 0.7% after being placed on a Negative Catalyst Watch list. In the pre-open session, Amrize had been down 1.2%, UBS 0.7% and Richemont 0.5%, the largest declines among SMI stocks. The broader market was seen down about 0.3% before opening, with DocMorris expected to fall 3.5%, Bachem to rise 0.7% and Barry Callebaut to gain 0.6%.
DocMorris later jumped 7.2% after the online pharmacy said it would issue a new convertible bond of about 100 million Swiss francs. ZKB said the move would improve operating liquidity. Adecco rose 2.2%, after earlier gaining 2% on target-price increases from Vontobel and Deutsche Bank. Bossard added 1.3% on positive analyst comments, and Barry Callebaut rose 1.6%, after earlier gaining 2.2% following comments by CEO Hein Schumacher at an investor meeting.
Medacta fell 4.1% after first-half margin development disappointed, while BioVersys dropped 1.8% following half-year results. New ratings included Bossard, with Berenberg raising its target to 265 francs from 250 while maintaining Buy; R&S, with Berenberg cutting its target to 29 francs from 35 while maintaining Buy; and SMG, with Stifel initiating coverage at Buy with a 48-franc target.
Barry Callebaut's CEO sounded calmer on cocoa markets and El Nino risk at the Barclays Global Consumer Staples Conference, according to analysts. Schumacher said market reactions after the cocoa crisis had become overly sensitive and that the industry was entering a second consecutive year with a cocoa surplus. He also saw no sign that cocoa price volatility would translate into stronger inflation in chocolate retail prices.
European futures pointed lower, with the Stoxx 600 seen down 0.4% and the Dax 0.5% before opening. The SMI could extend losses for a third straight day. Attention in the US turned to ADP labor-market data and a 10-year Treasury auction. In Switzerland, BioVersys and Medacta reported half-year results and Richemont held a general meeting.
Asian markets were resilient despite the escalating Middle East situation. Japan's Nikkei rose 0.4% to 65,495.23 and the Topix gained 0.3% to 4,063.61, supported by AI enthusiasm and a billion-dollar fiber-optic deal between Verizon and Corning that boosted cablemakers. Maki Sawada of Nomura Securities said semiconductor and AI-related shares were strong and contributed positively to the Nikkei. Furukawa Electric led gainers with a 13.2% rise, while Kyowa Kirin and Sumitomo Pharma fell about 5%.
In China, investors focused on the economic impact of the Middle East conflict. Houthi attacks on Saudi Arabia and US strikes on Iranian oil tankers raised energy costs, feeding August inflation. Producer prices rose 3.8% and consumer prices 0.8%, according to Dong Lijuan of China's National Bureau of Statistics, who said higher international oil and non-ferrous metal prices lifted prices in related sectors, while weak domestic demand limited broader inflation. Shanghai's index gained 0.3% to 3,953.13, and the key Shanghai-Shenzhen index rose 0.3% to 4,571.03.
In Asian currency markets, the yen benefited from speculation about near-term rate hikes by Japan's central bank. The dollar fell 0.3% to 153.55 yen, edged up to 6.7083 yuan and rose slightly to 0.8093 Swiss francs. The euro was little changed at 1.1628 dollars ahead of the European Central Bank's rate decision.
