Swiss stocks experienced a downturn in the latest trading session, mirroring the cautious mood among investors following monetary policy announcements from both the US and UK central banks. The Swiss Market Index concluded the day with a decline of 1.93%. The Bank of England chose to keep its bank rate steady at 4.75%, a decision influenced by inflation and wage growth that were higher than anticipated.
Meanwhile, the US Federal Reserve opted to decrease its federal funds rate by an additional 25 basis points, setting the range between 4.25% and 4.5%. ING analysts commented on the Federal Reserve's actions, stating, "The Federal Reserve cut rates by 25bp as expected yesterday, but the broader policy message was more hawkish than expected.
The new dot plot projections were heavily revised, now only factoring in 50bp of additional easing in 2025, and one FOMC member voted for a hold. Fed Chair Jerome Powell conveyed that the Fed will adopt a more cautious stance moving forward, emphasizing that more progress on inflation is necessary for additional rate reductions." In Switzerland, recent governmental data revealed a drop in the trade surplus, which fell to 3.96 billion francs in November from a revised surplus of 5.99 billion francs in October.
Conversely, the construction price index in the nation saw an annual rise of 0.5% in October. On the corporate front, shares of Roche faced a 3.25% decline following the announcement regarding its early-stage Parkinson's disease drug, prasinezumab, which did not meet the primary endpoint of the phase 2b Padova study.
The pharmaceutical giant noted that while the drug demonstrated potential in delaying confirmed motor progression, the results lacked statistical significance. In contrast to this trend, SoftwareOne, a Swiss software and cloud technology firm, witnessed a surge of 7% after announcing its merger with Norwegian counterpart Crayon Group.
In this stock-and-cash transaction, Crayon shareholders will receive 0.8233 new SoftwareOne shares along with 69 Norwegian kroner in cash per share held. Crayon's board plans to unanimously recommend that its shareholders accept SoftwareOne's proposal, with the completion of the deal expected in the third quarter of 2025..