On Thursday, Swiss equities faced a downturn, with the Swiss Market Index declining by 0.65%. This decline occurred amidst a whirlwind of corporate, economic, and geopolitical news impacting investor sentiment. Recent government data revealed that Switzerland's gross domestic product (GDP) growth moderated to 0.2% in the fourth quarter of 2024, a decrease from 0.4% in the preceding three-month period.
This figure aligns with consensus forecasts but falls short of the previous flash reading indicating a 0.4% gain. On an annual scale, the Swiss economy demonstrated a growth rate of 1.5%, reflecting a slow but positive trend. When examining the broader euro area, the economic sentiment indicator showed a modest increase to 96.3 points in February from a revised 95.3 points in January, surpassing expectations which had set it at 96 points.
Conversely, the final consumer confidence indicator registered at -13.6 points, an improvement from the prior -14.2 points, suggesting a slight rebound in consumer optimism. In the realm of corporate activities, online pharmacy DocMorris ($DOCM) saw a notable drop of 9.52% in its stock price following a ruling by the Court of Justice of the European Union.
The court addressed a case regarding price advertising, ultimately allowing member states to restrict promotional activities, particularly those related to non-prescription medicines. This landmark decision stemmed from a legal challenge against DocMorris concerning its advertising approaches in Germany, put forth by the Professional Association of Pharmacists. Meanwhile, Swiss Re ($SREN) reported growth in its financials, with a year-over-year increase in consolidated group net income reaching $3.24 billion, up from $3.14 billion.
Insurance revenue also rose significantly, hitting $45.60 billion compared to $43.90 billion in the prior year. As per the latest updates, the Swiss Solvency Test (SST) ratio for the reinsurance giant was recorded at 257% as of January 1, 2025, exceeding the targeted range of 200% to 250%. This positive performance resulted in an uptick of 0.52% in the stock closing. "Fourth-quarter earnings surpassed expectations, driven primarily by robust property and casualty underwriting, which effectively mitigated a weaker life and health performance.
Like its peers, Swiss Re has reaffirmed its FY25 guidance, factoring in the anticipated losses from the LA wildfires. The dividend per share was slightly higher than anticipated, although the weaker SST ratio might pose challenges today by suggesting lower potential for excess capital returns," analysts from RBC Capital Markets stated, reflecting on Swiss Re’s financial outlook. In conclusion, as the Swiss market grapples with varied influences, including economic indicators and corporate earnings adjustments, investors remain vigilant in assessing the evolving landscape of both domestic and international economic contexts..