Shares in main Swiss banks nosedive

Poorly performing tech-stocks triggered a fall in Swiss bank shares. Keystone / Steffen Schmidt

Stocks in Switzerland's two leading banks, Credit Suisse and UBS, have plunged sharply, on the back of heavy sell-offs on New York's tech-rich Nasdaq index.

Zurich’s SMI slid 1.88 per cent to close down 147.20 points at 7665.40 on Wednesday, pulled down by the poor performance of banking sector stock.

Credit Suisse shares were battered throughout the day’s trading, ending the session on the Zurich stock exchange down nearly nine per cent at SFr298.

Shares in UBS closed down 6.46 per cent at SFr213.50.

Market analysts blamed the drops on weak performances of tech-stocks in the United States. Credit Suisse was particularly badly hit by traders’ worries that a weak showing of the Nasdaq could affect earnings at the American bank Donaldson, Lufkin & Jenrette (DLJ) with which Credit Suisse is in merger talks.

UBS was dragged lower partly due to a 1.7 per cent decrease in third quarter profits at the US bank, Paine Webber, which the Swiss bank acquired in July.

Fears over losses from corporate bonds, exposure to the US market and the possibility of a hike in interest rates also contributed to badly denting the banking sector’s stock market profile.

swissinfo with agencies