The Swiss Market Index experienced a decline of 0.75% at the end of Tuesday's trading session as investors reflected on the latest business surveys and economic data releases from Switzerland and the euro area. The manufacturing Purchasing Managers' Index (PMI) for Switzerland saw a slight increase, rising to 49.9 points in September, up from 49 points in August.
This newly reported figure surpassed market expectations, which were set at 48.2. In terms of retail trends, seasonally adjusted retail sales in Switzerland rose by 3.2% in real terms in August compared to the previous year, benefiting from easing inflation conditions. Across the euro area, Eurostat's flash estimate indicated a decrease in annual inflation, dropping to 1.8% in September from 2.2% in August.
When excluding volatile categories such as energy, food, alcohol, and tobacco, the inflation rate marginally decreased to 2.7%, down from 2.8% in the preceding month. Commenting on the European Central Bank's (ECB) actions, experts from ING suggested that the bank seems well convinced that inflation is aligning with its target of 2%.
However, there remains a critical question regarding the speed at which the ECB intends to adjust interest rates back to neutral levels. If the ECB maintains high interest rates for an extended period, especially with the economy showing signs of slowing, it risks pushing inflation below its intended target.
The pressure of economic growth is mounting, indicating that the ECB may need to consider a quicker response. Although concrete plans are not yet in place, the upcoming October meeting could potentially be pivotal for the consideration of a rate adjustment. In terms of corporate news, the final HCOB Eurozone Manufacturing PMI plunged to a nine-month low of 45 in September, down from 45.8 in August.
This change signifies a marked and accelerated deterioration in the health of the manufacturing sector in the region, according to analyses by Hamburg Commercial Bank and S&P Global. Turning to the corporate front, Partners Group ($PGHN) rose by 0.55% following its announcement to sell its controlling stake in Techem, a German metering firm, to TPG and GIC for an impressive consideration of 6.7 billion euros.
In conjunction with this move, the co-investors of the Swiss private equity firm, namely CDPQ and Ontario Teachers' Pension Plan, are expected to divest their shares in Techem, with the transaction anticipated to close within the first half of 2025. Meanwhile, WISeKey International (WIHN.SW) reported a widening net loss of $9.5 million for the first half of the year, an increase from the previous year's loss of $7 million.
In addition, their net sales plummeted to $5.2 million, falling from $15.1 million. Nevertheless, the Swiss cybersecurity company remains optimistic about achieving better performance in the second half of the year, as evidenced by a stock increase of 2.91% at market close..