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Pharma giants drag SMI stocks down

SMI

A weak performance from Swiss pharma giants pulled the Swiss Market Index down again this week after investors dropped stocks in the sector on lackluster earnings reports. The peripheral European stocks and Japan managed to buck the trend this week, global stock markets remain under pressure in the run up to US election.

Pharma giants drag SMI stocks down

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Economic Data

Italian and Spanish markets were this week’s winners among global equity markets. Spain’s main stock index hit a six-month high as the country looked set end a 10-month long political deadlock. Italian stocks received a boost after shares in Monte dei Paschi, the world’s oldest bank, soared 28% after the bank unveiled a new capital-boosting plan on Monday. Sentiment towards the financial sector has improved globally in recent weeks as financial giants continue to report better than expected earnings results while analysts predict a more profitable future if interest rates rise in the US as expected.

Pharma giants drag SMI stocks down

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In other economic news, third quarter GDP data from the United Kingdom showed that the British economy grew at a rate of 0.5%, expanding at a faster pace than expected.  Analysts had expected growth of just 0.3% as the United Kingdom grapples with uncertainty around its decision to leave the European Union.

Pharma giants drag SMI stocks down

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Swiss Economic Data

In Switzerland, the UBS Consumption Index strengthened in September, contrasting with weak official retail sales data released earlier this month. UBS reported that the climb in the measure, which reflects consumption trends in the Swiss economy, was driven by record high new vehicle registrations and an upsurge in domestic tourism.

Pharma giants drag SMI stocks down

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Swiss Companies

In company news, ABB Ltd disappointed investors this week after the company reported that operational earnings fell 1% year on year. The robotics, power and technology company, however reported that steady revenues and diligent cost-saving initiatives have helped to maintain largely stable earnings despite headwinds from the tough macroeconomic and geopolitical conditions. Syngenta was also in the spotlight this week after the company said that gaining approval for its $43 billion takeover by China National Chemical Corp will be pushed back to the first quarter of 2017 due to a European Union antitrust review.

Pharma giants drag SMI stocks down

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Investec
Investec is a distinctive Specialist Bank and Asset Manager. We provide a diverse range of financial products and services to a niche client base in three principal markets, the United Kingdom, South Africa and Australia, as well as certain other geographies. Investec’s strategic goals are motivated by the desire to develop an efficient and integrated business on an international scale through the active pursuit of clearly established core competencies in the group’s principal business areas.
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