A volatile week for Swiss stocks

27 November 2015 – Weekly Swiss and global market roundup.

Brought to you by Investec Switzerland.

The SMI is set to end the week slightly lower on Friday after losing almost all of last week’s 3% gain early in the week before rebounding on Thursday and Friday. Trading was mixed on Stock markets across the world this week as investors pondered the substance of the recent equity market rally amid a continued slump in commodities and escalating geopolitical tensions between Russia and Turkey.

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The prospect of diverging monetary policy in Europe and the US was also key to market sentiment this week. Investors cheered the prospect of fresh stimulus measures in Europe early in the week. Last Friday’s comments from European Central Bank (ECB) Head Mario Draghi, to ‘do what we must’ to raise inflation, led to anticipation that the ECB would announce further easing measures as early as December. At the same time, the odds that the Federal Reserve would end a seven-year period of near-zero interest rates at its December meeting reached 70%. It has been more than 21 years since the Federal Reserve last raised interest rates at the same time as its main counterpart in Europe eased monetary policy.

In Swiss economic news, Switzerland’s consumption increased slightly in October, driven by better retail trade prospects along with brighter consumer confidence. A report from Moody’s rating agency confirmed that consumption has remained solid, reflecting a robust labour market and gains in household income due to cheaper imports.

In company news, Biotech firm Actelion Ltd was the weeks SMI winner after analysts raised the firm’s sell rating to hold on near-term positive potential of its Pulmonary Arterial Hypertension franchise.

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