Swiss stocks concluded Wednesday on a positive note, with the Swiss Market Index showing an increase of 0.82%. This uptick coincided with investors processing the latest data concerning local inflation and recent earnings announcements. Switzerland's annual inflation rate observed a decrease to 0.3% in February, down from 0.4% in January, although this figure surpassed the anticipated market expectation of 0.2%.
On a month-to-month basis, consumer prices climbed by 0.6%, in contrast to a previous decline of 0.1%. In a broader context, Switzerland has enforced additional sanctions against Russia, continuing its stance amid the ongoing conflict in Ukraine. These new measures supplement the latest sanctions package from the European Union, reflecting the country’s commitment to aligning its policies with international responses to geopolitical tensions.
Turning to the euro area, the final HCOB Eurozone Composite PMI Output Index remained at 50.2 for February, unchanged from the preceding month. This stability suggests that the private sector within the region continues to experience marginal growth. Data compiled by Hamburg Commercial Bank and S&P Global showed that while the manufacturing sector had been facing downturns, recent indicators suggest a potential easing which could lead to overall economic recovery.
Cyrus de la Rubia, the Chief Economist at Hamburg Commercial Bank, noted, 'The good news is that the downturn in the manufacturing sector is softening, which could pave the way for a recovery of the whole economy.' He further mentioned that prior to the next meeting of the European Central Bank (ECB), the focus will be on wage-driven input cost increases, especially given the central bank's current focus on services inflation.
The ongoing lack of indications of abating input cost inflation has sparked discussions within the ECB regarding the potential to pause rate cuts during the upcoming meeting. On the corporate front, Swiss Steel (STLN.SW) experience a notable surge of 11.39%, following the approval from the SIX Exchange Regulation to voluntarily delist its shares from the SIX Swiss Exchange.
The company’s final trading session on the exchange is scheduled for June 5, with delisting taking effect the following day. Additionally, Swiss pharmaceutical giant Sandoz Group ($SDZ) reported a rise in net sales for 2024, achieving $10.36 billion compared to $9.95 billion the previous year. This growth is attributed to double-digit expansion in its biosimilars segment and increased sales across all three regions where the group operates.
For 2025, Sandoz anticipates mid-single-digit growth in net sales, indicating positive momentum as new biosimilar launches are planned. Although the stock edged up slightly by 0.20% at the closing bell, RBC Capital Markets pointed out that while the company's guidance aligns with earlier expectations, it falls short of the consensus which forecasts a 7% year-over-year growth in net sales, with a limited foreign exchange impact anticipated.
'We note that the company is well hedged at an EBITDA level and expects no material FX impact on the core margin,' RBC emphasized. $SWISS20 $SDZ.