BRUSSELS (dpa-AFX) - The Switzerland stock market ended flat on Thursday as worries about the impact of the coronavirus pandemic on its economy weighed on sentiment and prompted investors to stay cautious.
The Swiss government said the country's Gross Domestic Product will fall at the sharpest pace in decades this year.
After edging up slightly in early trades, the market tumbled and stayed weak till the penultimate hour. Finally, despite staying higher for sometime, it pared gains and ended slightly weak.
The benchmark SMI ended down 5.08 points, or 0.05%, at 9,625.48, after scaling a low of 9,529.99 and a high of 9,701.60 intraday.
Switzerland's federal budget deficit could jump to around 6% of national output this year due to impact of the coronavirus crisis, the country's finance minister Maurer said on Wednesday.
Small Swiss businesses should not worry that the government might raise rates on around 17 billion Swiss francs worth of 0% coronavirus emergency relief loans granted so far, Maurer said.
Investors also noted that the Swiss National Bank reported a loss of 38.2 billion Swiss francs for the first quarter as the value of its foreign currency holdings tumbled due to the coronavirus crisis.
Credit Suisse ended stronger by about 2.3% after the bank reported a 75% jump in first quarter net profit. The bank, however, cautioned the global virus pandemic could impact performance in coming quarters.
Alcon and UBS Group both ended higher by 2.5%. Adecco advanced 2.4% and Swtch Group gained 2.05%, while ABB, Richemont and LafargeHolcim gained 1.25 to 1.5%.
Givaudan, Nestle, Zurich Insurance Group, Sika and Swisscom declined 1 to 1.8%, while Swiss Re shed about 0.8%.
Among midcap stocks, AMS gained 5.8%. Dufry shares ended stronger by about 5.5%. The company said it is canceling payment of 2020 dividend.
Georg Fischer, Helvetia and VAT Group gained 2.3 to 2.7%, while Baloise Holding moved up 1.85%. Lindt & Sp Ps, Straumann Holding, Temenos Group and Lindt & Spruengli lost 1.3 to 1.8%.
The Swiss economy is forecast to contract sharply in 2020, in the wake of the measures taken to contain the coronavirus and to recover slowly next year, the State Secretariat for Economic Affairs, or SECO, said Thursday.
According to expert group of SECO, gross domestic product will fall 6.7% this year instead of 1.5% decline estimated in March. This would be the biggest slump since 1975.
The agency updated its economic forecast outside of the normal schedule.
Early this month, the government said the Swiss economy could see a double-digit contraction this year due to Covid-19, pandemic.
A very sharp fall in economic activity is expected for the first half of 2020 as companies were forced to restrict or completely suspend their operations, triggering an abrupt fall in production and private consumption. Moreover, international environment deteriorated as global supply chains disrupted.
The unemployment rate is forecast to average 3.9% over the whole year.
The expert group forecast the economy to grow 5.2% next year, which would be a relatively slow rise from a very low starting point.
The SECO cautioned that the pandemic and associated containment measures could last longer than predicted, which would slow the recovery significantly. The Covid-19 pandemic is also magnifying existing economic risks, the agency added.
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