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Swiss Stocks Open Week Upbeat; Sandoz Group Gains

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The blue-chip Swiss Market Index was up 0.36% on Monday's close as investors get ready for a busy week of labor market and economy-related data releases while closely following geopolitical developments in the Middle East.

"Tensions in the Iran conflict have continued to escalate since Friday, with a series of tit-for-tat strikes around the Strait of Hormuz despite a fragile ceasefire framework ... However, overnight developments suggest a tentative de-escalation, with the US and Iran reportedly agreeing to halt further attacks ahead of renewed technical talks in Doha this week," said analysts at Deutsche Bank Research. "Both sides are said to be standing down for now, allowing shipping flows to continue, although disputes over key provisions of the memorandum of understanding-particularly around control and potential costs for transit through Hormuz-mean the situation remains fragile and risks to regional stability persist."

It was a quiet day of local economic news back home in Switzerland, while the release of KOF leading indicators, as well as the country's May retail sales numbers and June inflation data, are among this week's agenda. Market watchers are also awaiting the latest inflation and unemployment figures for the eurozone, among other key data releases.

On the corporate front, the US Food and Drug Administration accepted Sandoz Group's (SDZ.SW) two abbreviated new drug applications for an in-house generic tirzepatide autoinjector addressing the same indications as the reference medicines Mounjaro and Zepbound, including type 2 diabetes mellitus and weight management. The Swiss pharmaceutical major's stock gained 1.84% at closing.

Meanwhile, Deutsche Bank Research lifted its price target for UBS Group (UBSG.SW) to 45 francs from 40 francs, with a buy rating on the stock, as it "modestly" upgraded its forecasts for the Swiss banking group ahead of its second-quarter results. At the end of the trading day, UBS shares were 0.03% in the green.

"While UBS always remained focused on the business ever since the Credit Suisse acquisition and reported strong commercial momentum in most quarters over the last three years, many investors were focused on the negative regulatory impact from the new Swiss too big to fail regulation. However, also investor sentiment is now shifting back to the business as UBS increases capital return and the capital markets remain very supportive for the bank," according to the research firm.

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