SMI Ends Sharply Lower After SNB Hikes Rates And Signals Further Tightening
(RTTNews) - Swiss stocks tumbled on Thursday as investors went on a selling spree, weighed down by fears about a recession after several central banks, including the Swiss National Bank and the Federal Reserve, raised their interest rates and signaled more increases in the coming months.
Switzerland's central bank raised its key interest rate for the third straight meeting today and said it cannot rule further tightening in the policy rate, to counter rising inflationary pressures and spread of inflation.
The central bank raised its policy rate by 0.5 percentage points to 1%, in line with expectations. This was the third consecutive rate increase after the 75 basis points hike at the September meeting took the rate to positive zone for the first time since early 2015.
"It cannot be ruled out that additional rises in the SNB policy rate will be necessary to ensure price stability over the medium term," the bank said in the statement.
The benchmark SMI ended with a loss of 280.55 points or 2.51% at 10,880.14, the day's low. The index stayed weak right through the day's session.
All the components of SMI ended in the red. Sonova, the biggest loser, ended 5.42% down. Sika, ABB, Holcim, Partners Group, Richemont, Lonza Group, Alcon, Geberit and Nestle lost 3 to 4%.
UBS Group, Swiss Life Holding, Credit Suisse, Swiss Re, Novartis and Roche Holding also ended sharply lower.
In the Swiss Mid Price Index, Galenica Sante, PSP Swiss Property and Swiss Prime Site managed to move higher, and ended with gains of 0.95%, 0.54% and 0.43%, respectively.
AMS plunged more than 7%, while Straumann Holding, Zur Rose, VAT Group, Belimo Holding, Bachem Holding, Schindler Holding, Schindler Ps and Kuehne & Nagel ended lower by 3.2 to 5.3%.
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