Swiss stocks slipped into negative territory on Tuesday, with the Swiss Market Index closing 0.17% lower, as hostilities between the US and Iran further intensified.
"The return of the US blockade [on Iran] is much more impactful for markets than the previous suspension of the sanction waiver on Iranian oil. The Memorandum of Understanding is starting to look well and truly dead. The consensus says neither side wants an escalation - yet their recent moves tell a different story. Clearly, oil prices simply aren't high enough yet to compel Washington to push harder for de-escalation," analysts at ING said. "Developments in the Middle East have also seen European natural gas prices surging."
On the economic front, the annual inflation rate in the US eased to 3.5% in June from 4.2% in the previous month, while the annual core inflation rate edged down to 2.6% from 2.9% earlier.
Back home, Switzerland's producer and import price index declined by 0.3% month over month in June and by 2.1% on a yearly basis to 99.8 points, data from the Federal Statistical Office showed.
In corporate news, Roche (RO.SW) launched a fully automated cobas hepatitis D virus test in countries accepting the CE mark. The new test allows clinicians to diagnose the virus in a reliable manner and monitor infected individuals' treatment response. The Swiss pharmaceutical major's stock closed the trading session down 0.71%.
Meanwhile, RBC Capital Markets reiterated its outperform rating on Lonza (LONN.SW), with a price target of 720 francs, amid expectations that supply and demand in biologics will remain tight. At closing, the Swiss pharmaceutical manufacturer's shares were 1.05% in the red.
"Lonza sits at the CDMO peer median on 2027E EV/EBITDA despite being the largest, most diversified, and fastest-growing name in the group. The stock has derated for two years even as earnings have grown c.20% pa. Supply-demand in biologics and ADCs remains tight, governance has improved materially, and the regulatory track record is strong," according to the research firm. "The absence of a near-term catalyst may discourage momentum capital, but we believe provides an attractive entry point for longer-term investors."
In other news, Switzerland finalized its negotiations with the UK on modernizing the two countries' free trade agreement, including an expansion of the bilateral legal framework concerning trade in services, investment and digital trade.