BRUSSELS (dpa-AFX) - The Switzerland stock market ended sharply higher on Tuesday, after the U.S. Federal Reserve announced an emergency interest rate cut to counter the likely economic impact of the coronavirus outbreak.
Data showing a stronger than expected fourth-quarter GDP growth in Switzerland contributed as well to market's gains.
The benchmark SMI ended up 136.57 points, or 1.37%, at 10,087.40, after scaling a low of 9,960.61 and a high of 10,286.29 intraday.
On Monday, the index ended with a gain of 119.80 points, or 1.22%, at 9,950.83.
Sika, the top gainer in the SMI index, rallied 4.3%. Alcon gained about 3.5%, while Nestle, Lonza Group, Zurich Insurance Group, Givaudan and Swisscom gained 2 to 3%.
Roche Holding ended nearly 2% up and SGS advanced 1.73%. Adecco, Richemont and Swiss Life Holding also closed notably higher.
Bank stocks were weak. Credit Suisse declined 1.4% and UBS Group edged down marginally. Julius Baer ended lower by about 2%.
Pharma stock Novartis closed lower by about 1.1%. The U.S. Justice Department said on Monday that Novartis' unit Sandoz has agreed to pay $195 million to strike a deferred prosecution agreement to resolve antitrust charges.
In the midprice section, Lindt & Ps climbed more than 6%. Temenos Group and Lindt & Spruengli ended nearly 6% up. Clariant advanced 4.1%, while Straumann Holding, VAT Group, PSP Swiss Property, Vifor Pharma, Swiss Prime Site and Partners Group gained 2 to 3.4%.
On the economic front, data from the State Secretariat for Economic Affairs, or SECO, showed Switzerland's Gross domestic product grew 0.3% sequentially in the fourth quarter after expanding 0.4% a quarter ago. However, this was faster than the expected growth of 0.2%.
On a yearly basis, economic growth improved to 1.5% from 1.1% in the third quarter. Economists had forecast an expansion of 1.3%.
In 2019, the economy expanded 0.9% versus 2.8% growth in 2018. The annual expansion was driven by manufacturing and service sectors.
The U.S. Federal Reserve announced its decision to lower the target range for the federal funds rate by 50 basis points to 1 to 1.25%. The accompanying statement from the Fed say the fundamentals of the U.S. economy remain strong but added that the coronavirus poses evolving risks to economic activity.
The central bank added that it is closely monitoring developments and their implications for the economic outlook and will use its tools and act as appropriate to support the economy.
Earlier, finance chiefs from the world's largest economies released a statement pledging to use 'all appropriate policy tools' to address the economic fallout from the deadly coronavirus outbreak.
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