Swiss Stocks Dip as ECB Raises Rates Again
Swiss stocks dipped lower in response to the European Central Bank's latest interest rate hike. The ECB raised its three key rates by 25 basis points and flagged fresh inflation risks tied to energy prices, while nudging up its longer-term inflation forecasts.
The central bank also announced that from September 16th, it will pay banks 2.50% on deposits, a move seen as moving policy towards the upper end of 'neutral' by ING, a Dutch bank. This rate increase is expected to weigh heavily on long-duration stocks, where much of the payoff sits years away.
UBS and Roche, two heavyweight stocks in Switzerland, were among those that fell despite separate updates from each company. UBS plans to close its Shenzhen fund-sales unit by the end of September due to tough competition and weak demand, while Roche's stock dropped even after it received a priority review for its drug Enspryng in MOGAD.