Tariffs: Swiss index SMI down sharply in pre-market trading

Swiss benchmark index SMI down sharply in pre-market trading Keystone-SDA

The avalanche on the stock markets in Asia continued on Monday. The trade war unleashed by US President Donald Trump is causing a sell-off. According to experts' calculations, the leading Swiss SMI index is likely to fall by around 2%.

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Last week, the SMI had already lost more than 9%. The recent double-digit price gains since the beginning of the year were practically wiped out. Now it is likely to give way to a clear minus. The reason for this is the concern that the customs dispute could cause inflation to rise and plunge the economy into recession.

“The risk of recession has increased significantly,” said the broker IG. Numerous strategists, such as those at JPMorgan, are also increasing the probability of an economic downturn in their models.

+ US tariff shock: adding up the Swiss bill

The broker also indicates further losses for the German Dax and the British FTSE 100 at around 6.35am. The Dax is expected to fall by more than 4% and the British FTSE 100 by around 2.5%. However, losses of between 3% and 5% are also expected for US shares.

The stock markets in China also reacted with sharply falling prices. The Shanghai Composite Index fell by more than 6%, Hong Kong’s Hang Seng Index by more than 10% and Japan’s Nikkei by almost 7%. However, the stock exchanges in China were closed on Friday for a public holiday. According to one trader, this could mean that some of the slump there could still have some catching up to do.

In the previous week, Trump had announced major tariff increases. The extent of the all-round blow simply overwhelmed the markets – the first wave of selling across the Atlantic happened on Thursday. Beijing then had its say on Friday, imposing tariffs of 34% on goods from the US.

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Translated from German by DeepL/ts

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