Swiss stocks end at year-low

Low point for Swiss Market Index Keystone Archive

Shares on the Swiss stock market ended Thursday's session at a year-low, with the blue chip SMI index down 1.84 per cent at 7560.2, well below the year's high point of 8180.1.

Receding prospects for a quick cut in US interest rates continued to depress Swiss stocks through the session. Early losses on the New York Stock Exchange also encouraged the negative tone seen across European bourses.

The US Federal Reserve Chairman Alan Greenspan’s comments on Wednesday suggested to markets that the central bank would probably wait until its March 20 meeting to cut interest rates again.

Lower interest rates in the US are seen as positive for share prices as any reduction in the cost of borrowing money would help boost the flagging US economy.

This latest delaying move by the US authorities is now being seen as negative for market sentiment, as borrowing costs for US industry and consumers remain higher longer.

On the Swiss bourse, financial and technology issues were weakest, while only a handful of defensive shares, like Novartis, managed to buck the downward trend.

Leading the losers on the Swiss market was the supply chain management group Swisslog. Its shares dropped more than 30 per cent at one stage after posting a 2000 loss after goodwill amortisation.

Financial stocks dropped back between one and five per cent. These had made sharp gains recently on hopes of an aggressive US interest rate easing.

swissinfo with agencies