The Swiss Market Index demonstrated resilience on Thursday, closing 0.59% higher as investors absorbed the latest earnings reports, trading updates locally, and other economic data from Europe. Switzerland's foreign currency reserves saw an increase, reaching 718.83 billion francs in October, a rise from the revised 715.70 billion francs in September, according to data from the Swiss National Bank.
In the euro area, the HCOB Eurozone Construction PMI Total Activity Index rose slightly to 43.0 in October from 42.1 in September, indicating a decline in output within the construction sector, with Germany experiencing the most rapid decrease in business activity. Meanwhile, the Bank of England lowered the bank rate by 25 basis points to 4.75%, a move anticipated due to ongoing disinflation efforts.
However, the central bank cautioned that the recently unveiled UK Budget may lead to a slight uptick in inflation, with the consumer price index predicted to rise just under half a percentage point at its peak. On the corporate front, Zurich Insurance Group reported a modest gain of 0.27% after revealing a 6% year-over-year increase in its property and casualty insurance revenue, totaling $33.26 billion for the first nine months.
Additionally, the group marked a 4% rise in gross written premiums within the same sector during this time. Swiss Re, on the other hand, anticipates a group net income of $2.2 billion over the first three quarters and a forecast of $100 million for the third quarter, with results expected to be published on November 14.
The company also added $2.4 billion to its property & casualty reinsurance prior year U.S. liability reserves in the third quarter, leading to a 7.24% increase in stock value at closing. Analysts at Baader Europe noted, "Swiss Re expects to report a group net income of approximately $100m for Q3 24 compared to $1.02bn for Q3 23.
Assuming standard loss activity, the company anticipates achieving a Group net income of over $3bn for 2024, lower than the previous forecast of more than $3.6bn." Despite the profit warning for 2024, the share price increased this morning, suggesting that the market perceives Swiss Re has adequately addressed its financial records in Q3 and will not face substantial unforeseen claims in Q4 24..