Swiss Stock Market Down Only Slightly After a Panic-Stricken Start

A Comeback in the Afternoon

The Swiss stock market fell sharply on Friday. Following the massive sell-off—particularly of technology stocks—the previous evening in the U.S., there was also widespread, near-panic selling here—at least during the first half of the trading session. From Thursday’s new all-time high of nearly 15,100 on the SMI, the benchmark index fell by just under 500 points, dipping below 14,600 at times. However, thanks to a rally in the afternoon, losses were ultimately limited, and investors’ nerves calmed down a bit.

Following the euphoric rally after the U.S. election results were announced on Wednesday, sentiment on international stock markets quickly turned again. The overarching theme—which has intensified since the election—is the valuation of the tech sector. The tug-of-war between political optimism and regulatory uncertainties is likely to enter the next round, according to an analyst commentary. On the one hand, there is relief over the clear outcome of the U.S. midterm elections; on the other, there is concern that stricter AI regulation could put a damper on growth.

SMI Remains Above August’s Interim High

The SMI ultimately fell 1.14 percent to 14,796.50 points, with all stocks—except for Sandoz—closing in the red. On a weekly basis, the index posted a minimal decline of 0.1 percent. Looking beyond the fading dust of the U.S. elections, it is worth noting that, following a very strong October with a gain of over 7 percent, the SMI continues to trade above its previous interim high from mid-August.

On other European stock exchanges, prices fell by a similar margin on the reporting date, or even more sharply, as was the case with the DAX in Frankfurt (-2.0%). In the U.S., tech stocks at least began to rebound ahead of the weekend.

Here in Germany, too, tech stocks remained relatively stable—or even rebounded slightly from the previous day’s losses—compared to other sectors, at least through the afternoon. But here, too, nervous sentiment toward the end of the trading session caused the trend to reverse. As a result, Logitech (-1.7%), after a promising start, ultimately fell slightly more than the overall market.

The biggest loser in the SMI was Swiss Re (-4.6% to 151.95 CHF). The stock had risen sharply over the previous two days, driven by strong quarterly results on Thursday. However, the confirmation of the “Sell” rating by UBS on Thursday evening put a damper on the rally.

The heavyweights also failed to provide any support; among them, Nestlé (-1.6%) lost slightly more ground than Roche (PS -0.4%) and Novartis (-0.8%).

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