Swiss benchmark index reaches seven-year high

The blue chip Swiss Market Index reached its highest level since 2007 Keystone

The Swiss Market Index SMI, which tracks the performance of Switzerland’s 20 largest stocks, has reached its highest level in almost seven years. The blue chip index was lifted by Roche and Novartis shares, riding on merger and acquisition news.

The benchmark SMI representing 85% of the Swiss equity market rose 1.1% to 8752.86 points on Tuesday, the highest level since December 2007. The index with a base value set at 1500 as of June 30, 1988, reached its all-time high of 9548.09 on June 4, 2007.

The shares of Basel-based pharmaceutical companies Roche and Novartis, which together account for about a third of the index weighting, each rose 2% after drug maker Merck of the United States agreed to buy biotechnology company Idenix for $3.9 billion (CHF3.5 billion).

The stock of Idenix more than tripled, boosting the value of Novartis’ 22% stake in Idenix by about $650 million, according to analysts.

The SMI also increased alongside other international indices including the German Dax and the Dow Jones Industrial Average, which also reached their highest levels in years after the European Central Bank cut interest rates last week.