Business gets back to work

The stock markets are returning to normal Keystone Archive

The business world is getting back to normal after the holiday season with the first full week of trading on the Swiss stock exchange.

During thin trading at the end of last week, traders saw a move back to technology stocks in the wake of the Nasdaq rally in New York. Companies such as Unaxis and ABB, whose share prices have taken a pounding over the last 12 months, were suddenly back in fashion amid optimism that the US economy will soon pick up.

On the other hand, defensive stocks such as the health care group, Novartis and the food conglomerate, Nestlé, saw their share prices under pressure as investors switched.

The coming week will show how strong investors’ stomachs are for those tech stocks or whether there is still a lot of caution about the timing of a US recovery.

Feel good factor

On the currency markets, traders will be keeping their eye on the euro to see how far it can take advantage of the feel good factor generated by the New Year’s successful launch of banknotes and coins to 300 million Europeans.

The currency made some strong gains in the days following the launch but by Friday last week there were already signs that the euro was giving up the progress made against the dollar and the Swiss franc.

That’s bad news for Swiss exporters who continue to warn of the dangers posed by the franc’s strength. The manufacturing sector says thousands of jobs are in danger as Swiss exports become too expensive.

The release on Wednesday of the latest unemployment figures is likely to prompt further calls for action. Last month, the jobless rate crept over 2 per cent for the first time in more than 18 months.

This week could see the rate increase still further as cuts from Swissair and other big corporate names continue to inflate the jobless pool.

By Michael Hollingdale