Trading on the Swiss market was slow on Thursday with investors sticking to the sidelines amid uncertainty caused by Tuesday's terrorist attacks in the United States. The dollar was steady against the euro and the Swiss franc.
The blue chip Swiss Market Index ended the day up again on Thursday amid thin trading. It gained 1.2 per cent to close at 5907.5
The SMI had already managed to recover some lost ground on Wednesday, ending up 2.5 per cent after dropping more than 7 per cent on Tuesday.
"Volumes are poor with no orders from customers. I am sure that will continue until the New York market reopens," said Sacha Vicente, a trader with BNP in Basel.
"There are fears that when New York does open, it will drop a few per cent and that will hit European markets," he added.
New York markets are to remained closed on Thursday because of extensive infrastructure damage to the city - the heart of the US financial system - although they are expected to reopen by Monday at the latest.
Eleonore Charraz, a trader at Bank Leu, told swissinfo that the longer the US markets remained closed the more stable the New York Stock Exchange would be when it finally did re-open.
"Since it gives people and banks the time to think I don't expect a major downward move in the US when it reopens. The Dow Jones may lose between five and eight per cent," Charraz said.
Some bright spots
Among the gainers on the Swiss stock market was the world's second largest reinsurance group, Swiss Re.
"They said the losses would be SFr1.2 bilion (from US damaged claims) although that is just an estimate. But businesses like Swiss Re can deal with these sorts of losses," said Geada Ceraghetti, analyst at Banca del Gottardo.
"The reaction on Tuesday was overdone. We still have a buy on the stock," she added, noting that analysts would likely start to cut earnings estimates for Swiss Re as a result of projected losses related to the US terror attacks. Swiss Re had shed as much as 17 per cent of its value on Tuesday before starting to recover on Wednesday.
Luxury goods lower
The luxury goods sector was lower on fears that consumer sentiment may take a hit from the terror attacks in the US, with consumers' possibly postponing or even cancelling luxury purchases.
"It is going to be thin and volatile. Investors will be sidelined, waiting for the US markets to reopen," said Petra Matt, head of the sales desk at Rahn and Bodmer Banquiers.
Money market looks to rate cut
Traders on the Swiss money markets assessed the odds of further central bank action to calm financial market nervousness over potential strains in the global economy.
Money rates in the mean time held steady with Swiss National Bank (SNB) repo liquidity additions back to levels seen before the devastating attacks on major US landmarks.
But the regular meeting of the European Central Bank's (ECB) monetary policy making council, scheduled for later on Thursday, is being seen as a forum for leading central banks to re-emphasize the need for confidence building measures.
Market talk has been that with the ECB meeting, some concerted action by the US Federal Reserve, the ECB and the SNB might lead to lower interest rates.
Central banks have already said they were ready to add liquidity to the financial system to tackle liquidity strains. The Swiss National Bank generously added funds to the money market on Wednesday.
swissinfo with agencies