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Financial experts alarmed: stock prices worldwide are in a downward trend due to the escalating crisis in the Middle East
The intensified downward trend on the international financial markets did not stop before the weekend. The Swiss stock market couldn't escape this either: Against the backdrop of the escalating crisis in the Middle East, the leading index SMI hit a new low for the year and, at around 5 percent, the largest weekly loss since June 2022. "Instead of a golden October, the world's stock exchanges are currently experiencing an autumn storm," said one stock market expert. The fact that nervousness has increased noticeably in the last few days was shown by the volatility measure VSMI. The index, known as the fear barometer, rose to its highest level since the collapse of Credit Suisse in March...
Financial experts alarmed: stock prices worldwide are in a downward trend due to the escalating crisis in the Middle East
The intensified downward trend on the international financial markets did not stop before the weekend.
The Swiss stock market was also unable to escape this: against the backdrop of the escalating crisis in the Middle East, the leading index SMI hit a new low for the year and, at around 5 percent, the largest weekly loss since June 2022.
“Instead of a golden October, the world’s stock exchanges are currently experiencing an autumn storm,” said one stock market expert. The fact that nervousness has increased noticeably in the last few days was shown by the volatility measure VSMI. The index, known as the fear barometer, rose to its highest level since the collapse of Credit Suisse in March this year.
Market participants are currently particularly concerned about the consequences of the new Middle East crisis for oil prices, inflation and the global economy as a whole. Added to this is the ongoing rise in yields on the bond markets, which is putting pressure on the stock markets. On the one hand, this makes bonds more attractive to investors than stocks, it was said. On the other hand, higher returns also mean higher financing costs for companies, which in turn puts a strain on the stock markets. The fact that the SMI lost significantly less today than the day before is mainly due to the index heavyweights, which clearly held up better than the day before.
At the end of Friday, the SMI fell 1.0 percent to 10,348.60; the new low for the year marked that morning was still slightly lower at 10,342 points. For the whole week, this means a loss of 5.1 percent, although the most important Swiss stock index has now lost 3.5 percent so far this year.
The German DAX (-1.6%), the British FTSE 100 (-1.3%) and the French CAC 40 (-1.5%) also suffered significant losses on Friday. And the US stock exchanges were again clearly in the red in the afternoon.
As is usually the case in politically turbulent times, the Swiss franc was sought as a safe haven. The EUR/CHF currency pair also fell to its lowest level so far this year at 0.94175. Here you have to go back to September 2022 to find similarly low prices.
Analysis and implications
According to a report by www.bluewin.ch, the downward trend on the international financial markets continued last weekend. The Swiss stock market, represented by the leading index SMI, also recorded losses and hit a new low for the year. The reason for the uncertainty among market participants lies in the escalating crisis in the Middle East and the associated effects on the price of oil, inflation and the global economy. In addition, the continued rise in yields on the bond markets is weighing on the stock markets as bonds become more attractive for investors and companies have higher financing costs. The negative effects on the market can also be observed in other countries, such as Germany, Great Britain and the USA.
The effects on the Swiss stock market are clearly noticeable. The SMI lost 1.0 percent on Friday and reached a new low for the year. On a weekly basis, the SMI recorded a loss of 5.1 percent. Overall, the Swiss stock index has already lost 3.5 percent since the beginning of the year. This poses a challenge for companies as they face higher financing costs.
Another effect of the uncertain situation is the search for safe havens, such as the Swiss franc. The EUR/CHF currency pair also fell to its lowest level this year.
Current developments on the financial markets show that political uncertainty and global crises have an impact on the economy and can lead to volatility. It is important to monitor further developments and carefully analyze possible impacts on the market, consumers and the industry.
Read the source article at www.bluewin.ch