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(Bloomberg) -- Stocks in Switzerland slumped after the Swiss National Bank unexpectedly gave up its minimum exchange rate today, ending a three-year-old policy designed to shield the economy from the euro area’s sovereign-debt crisis.
The Swiss Market Index fell 6.7 percent to 8,584.19 at 11:25 a.m. in Zurich. The benchmark dropped as much as 8 percent, the biggest intraday percentage decline since October 2008, a month after Lehman Brothers went bankrupt, starting the financial crisis.
Holcim Ltd., the world’s biggest cement maker, slid as much as 21 percent, leading a decline in exporters. Watchmakers Cie. Financiere Richemont SA and Swatch Group AG tumbled more than 9 percent. Transocean Ltd., the world’s largest offshore-rig contractor, fell as much as 22 percent.
“We did not think it would be so quick,” said Pierre Mouton, who helps oversee $8 billion at Notz, Stucki & Cie. in Geneva, in a phone interview. “Nevertheless we’ve been thinking that at some point the SNB should abandon this peg, which became insane.”
In a surprise move, the central bank lowered the interest rate on sight deposit account balances that exceed a given exemption threshold to minus 0.75 percent from minus 0.25 percent.
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