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Swiss Market Ends On High Note For 2nd Straight Day

The Switzerland stock market ended on an upbeat note on Wednesday, as the mood turned quite bullish after U.S. Senate leaders and the White House reached an agreement on a massive $2 trillion stimulus bill.

Introduction of a COVID-19 refinancing facility by the Swiss National Bank to support liquidity to offset the economic impact of the coronavirus outbreak, contributed as well to market's sharp rise.

The benchmark SMI, which fell to 8,664.44 around noon, after having spurted to 9,136.83 earlier in the session, ended the day with a gain of 255.84 points, or 2.93%, at 8,989.16.

On Tuesday, the SMI ended up 572.53 points, or 7.02%, at 8,733.32, after having suffered a loss of 5.37% on Monday.

Zurich Insurance Group shares surged up 7.32%. Lonza Group gained nearly 7% and Swiss Re ended stronger by about 6.5%.

Credit Suisse ended 5.8% up after the lender said that profitability in the first quarter of this financial year has so far continued the strong year-on-year improvement trend, despite the virus pandemic and volatile market environment.

Swiss Life Holding and Alcon gained 5.7% and 5.5%, respectively. ABB ended 4.5% up, while UBS Group, Adecco, Novartis, Nestle, LafargeHolcim, SGS and Sika gained 1.7 to 3.2%.

In the midcap section, Dufry ended more than 13% up. Lindt & Sp Ps gained 8.5% and Straumann Holding advanced 7.7%. Helvetia, VAT Group, Lindt & Spruengli, OC Oerlikon Corp and Baloise Holding gained 4 to 7%.

The COVID-19 refinancing facility, or CRF, is aimed at strengthening the supply of credit to the Swiss economy by providing the banking system with additional liquidity, the SNB said in a statement today.

The interest rate for these refinancing transactions corresponded to the SNB policy rate. The CRF will be available from March 26.

There will be no upper limit on the amounts available under the CRF and drawdowns could be made at any time, the bank said.

The facility will allow banks to obtain liquidity from the SNB, which is secured by the federally guaranteed loans.

In order to further facilitate lending, the SNB has also submitted a proposal to the Federal Council to reduce the countercyclical capital buffer to 0% with immediate effect.

Most of the markets across Europe ended with strong gains. Among the major indices, the U.K.'s FTSE 100 surged up 4.45%, France's CAC 40 climbed up 4.47% and Germany's DAX climbed up 1.79%. The pan European Stoxx 600 ended up 3.09%.

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