Switzerland's blue chip share index plunged more than five per cent on Friday, dragged down by drug maker, Novartis, and Zurich Financial Services.This content was published on July 19, 2002 - 22:40
Investors dumped shares in Switzerland's biggest pharmaceutical firm, Novartis, amid fears that its half-year results - due next week - would fail to impress. Banks and insurers, strongly represented on the Swiss Market Index (SMI), were also hard hit.
The run on stocks pushed the SMI down 5.6 per cent - below the psychologically important 5,000 mark - shedding 295.2 points to close at 4,976.3, its lowest level since September 21.
Novartis's shares, down more than six per cent on the day, were driven lower by news that an Indian drug maker, Dr Reddy's Laboratories, had applied to sell a generic version of Novartis's Lamisil anti-fungal drug in the United States from 2005.
Analysts said the move, if successful, could hit the company's sales in 2005 to the tune of hundreds of millions of francs. The drug was Novartis's fourth biggest prescription seller last year, with US sales of $460 million.
Franc hits new highs against dollar
As the market sank, the Swiss franc rose to new highs against the dollar, touching SFr1.44 for the first time since February 1999. The strong franc is hitting export earnings, prompting investors to dump Swiss stocks ahead of next week's tranche of corporate results.
Among insurers, Zurich Financial shares tumbled by 11 per cent to SFr199 while Swiss Life shed more than eight per cent closing at SFr260. Credit Suisse, which owns underperforming insurer, Winterthur, was down more than six per cent.
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