Swiss Market Ends Sharply Lower On Growth Worries

The Switzerland stock market ended sharply lower, in line with most of the markets across Europe, as mounting fears about a global recession amid rising interest rates triggered heavy selling at several counters.

A downward revision in Switzerland's growth forecast weighed significantly on sentiment.

The benchmark SMI ended with a loss of 140.47 points or 1.32% at 10,478.54, the day's low.

Switzerland's economy is expected to grow less than previously estimated this year and next, as the economic prospects are hampered by a tense energy situation and sharp price increases, especially in Europe, the government said.

The expert group of the federal government forecast gross domestic product to grow 2% this year instead of the 2.6% growth estimated previously in June, the State Secretariat For Economic Affairs, or SECO, said today.

Likewise, the projection for next year was downgraded notably to 1.1% from 1.9% in the summer forecast.

Experts have significantly lowered their expectations for global demand, especially among Switzerland's main trading partners.

The expert group revised up its inflation forecast to 3% this year and 2.3% for 2023. In turn, this is likely to result in a cooling of domestic demand.

Despite strong employment growth in the first half of the year, unemployment is expected to rise in the fourth quarter in line with slowing economic growth. The average annual unemployment rate is projected to come in at 2.2% for this year, followed by 2.3% in 2023, the report said.

Swisscom declined 2.73%. Geberit, Credit Suisse, Alcon, Holcim, Zurich Insurance Group, Partners Group, Swiss Re, Roche Holding, Lonza Group, Nestle, Swiss Life Holding and Sika shed 1.2 to 2.2%.

UBS Group, Novartis and ABB also ended notably lower.

In the Mid Price Index, Zur Rose drifted down 4.7%. Helvetia, Adecco, Belimo Holding, Baloise Holding, SGS, Swiss Prime Site, PSP Swiss Property, Lindt & Spruengli, Schindler Ps and Schindler Holding lost 1.7 to 3.3%.

Bachem Holding shares soared 14%. SIG Combibloc gained about 1.4%.

Data from the Federal Customs Administration showed Switzerland's exports rebounded strongly in August, after falling for the first time in four months in July.

Exports increased by a real 2.1% month-on-month in August, reversing a 3.6% fall in July. Imports also climbed 1.3% from July, when they fell by 3.3%.

In nominal terms, both exports and imports grew by 1.4% and 1.5%, respectively, in August from a month ago.

The trade surplus decreased slightly to CHF 2.344 billion in August from CHF 2.347 billion in July.

According to the Federation of the Swiss Watch Industry, watch exports rose notably by 14.7% year-on-year in August.

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