Zürich’s stock market turned higher again on Thursday, 4 December 2025, as the Swiss Market Index (SMI) resumed its climb toward record territory, powered by cyclical and financial stocks on the back of renewed US rate‑cut hopes.
By the close, the SMI was up around 0.3% at roughly 12,896 points, recovering the previous day’s 0.25% dip and leaving the benchmark just over 2% below its all‑time high of 13,199 set in March. [1]
Yet the day was anything but quiet beneath the surface: high‑beta industrials and financials rallied, classic defensives lagged, and Leonteq plunged in double digits after warning of a full‑year loss — the biggest single‑stock story in Swiss trading today. [2]
SMI Rebounds After Brief Pause in Rally
After ten straight gains in November, the SMI finally snapped its winning streak on Wednesday, closing 0.25% lower at 12,858.33. [3] Pre‑market indications early Thursday already pointed to a rebound, with futures signalling the index would open roughly 0.4% higher around 12,910 points. [4]
That bullish tone largely held throughout the day. Around mid‑morning, the SMI was up about 0.3% near 12,895, while the SLI (30‑stock index) gained roughly 0.35% to 2,086 and the broader SPI climbed 0.33% to around 17,735 points. [5] MarketScreener’s end‑of‑day data later confirmed a close near 12,896.37 points, a 0.30% daily gain, and a year‑to‑date advance of roughly 11%. [6]
From a technical perspective, BNP Paribas’ IndexMonitor for the SMI notes that the index remains in a solid uptrend, still holding above a key breakout area around 12,843 points and not far from its record high at 13,199.05 reached on 3 March 2025. [7] Their analysis highlights:
- Upside potential: The path toward retesting the record high remains open as long as the index trades above support around 12,843 and further down at 12,726 and 12,570 points. [8]
- Risk scenario: A sustained drop below roughly 12,460 would signal a more meaningful reversal of the current bullish trend. [9]
In other words, today’s modest rise keeps the SMI comfortably within a bullish channel, with only a short step left to all‑time highs.
Cyclicals and Financials Drive Gains
The sector leadership in Switzerland today could hardly have been clearer. According to AWP/Finanz und Wirtschaft’s mid‑session wrap, cyclical stocks were firmly in demand, while defensives were used as a source of funds. [10]
Industrials and logistics in the spotlight
By late morning, the strongest advances among SMI heavyweights and broader Swiss large caps included: [11]
- Holcim: about +1.2–1.6% – benefiting from the global infrastructure and construction theme and the broader European cyclicals rebound.
- ABB: roughly +1.5% – supported by rate‑cut hopes and company news about a stake in a specialist for data‑center cooling systems, tapping into the AI and digital‑infrastructure boom. [12]
- Kühne + Nagel: around +1.1–1.4% – a classic beneficiary of improved global trade sentiment. [13]
- Sika: roughly +1% – aligned with the construction and infrastructure uptrend. [14]
MarketScreener’s closing snapshot of the SMI confirms that Givaudan, ABB, Kühne + Nagel, Holcim and Sika were among the top gainers, each adding roughly 1.2–1.7% on the day. [15]
Financials catch a bid
Financials also helped underpin the advance:
- UBS, Julius Bär and Partners Group were all up around 0.7–1.2% intraday, according to AWP, benefiting from the view that lower US rates will support risk appetite and lower funding costs. [16]
- Insurance giant Swiss Re was in focus after appointing Nicole Pieterse as its new Chief People Officer, part of a broader strengthening of leadership structures. [17]
Overall, investors rotated into economically sensitive names, a shift that ties neatly into a growing narrative that Europe — and by extension Swiss cyclicals — may be heading into a cyclical recovery phase.
Defensives and Pharma Shares Lag the Market
As is typical in a “risk‑on” session, classic defensive sectors lost some shine. AWP’s mid‑day commentary notes that healthcare and telecom names were selectively sold, with: [18]
- Novartis around –0.1 to –0.2%
- Roche roughly –0.2 to –0.3%
- Alcon, Straumann, Lonza and Swisscom each down around 0.3–0.4%
MarketScreener’s end‑of‑day rankings confirm that Swisscom, Novartis, Roche, Lonza and Alcon were among the sharpest decliners in the SMI, albeit with only modest losses of about 0.1–0.4% — more a sign of rotation than fundamental stress. [19]
An exception on the consumer side was Nestlé: after recent weakness linked to cautious commentary from US peer Procter & Gamble and a lawsuit in San Francisco against Nestlé USA and other consumer groups, the stock stabilised with a gain of about 0.3%. [20]
In the wider market, Lindt & Sprüngli participation certificates and Barry Callebaut shares advanced around 1.5% and 2.2% respectively, bucking the general defensive trend and highlighting still robust investor appetite for premium consumer brands. [21]
Leonteq in Free Fall After Profit Warning
The single biggest story in Swiss equities today was Leonteq, the Zurich‑based structured‑products specialist.
Profit warning and business update
In an ad‑hoc statement this morning, Leonteq announced it has completed its transition to the SA‑FRTB standard approach for market risk, achieving a Common Equity Tier 1 (CET1) ratio above 15% at end‑November — an important milestone in its regulatory overhaul. [22]
However, the same release warned that despite stronger client activity, a normalisation of market volatility has sharply reduced previously positive hedging contributions. Combined with restructuring and regulatory‑transition costs, Leonteq now expects an underlying loss in the “low double‑digit million” range for 2025, versus earlier expectations of underlying profitability. [23]
Key points from the business update: [24]
- Strategy & capital
- Transition to SA‑FRTB completed earlier than planned.
- CET1 ratio of above 15% end‑November.
- Focus on improving profitability and capital efficiency over the next 12–24 months.
- Business trends (July–November 2025)
- Over 127,000 client transactions, up 18% year‑on‑year.
- More than 27,000 products issued, up 49% versus the prior year.
- Transaction volume around CHF 11.9 billion, up 23% year‑on‑year.
- Commission and fee income broadly in line with the first half of 2025.
- Costs and restructuring
- Underlying cost guidance cut from CHF 220 million to about CHF 205 million for 2025.
- Additional CHF ~10 million in restructuring and regulatory‑transition expenses.
- Planned sale of its Japanese subsidiary with completion targeted for Q1 2026, and an expanded near‑shoring hub in Lisbon (now 97 employees, about 25% of non‑sales, non‑trading staff).
- Governance and regulation
- Chair Christopher Chambers will not stand for re‑election at the 2026 AGM.
- FINMA’s outstanding supervisory measures are close to being fully resolved after a longstanding investigation into past distributor transactions.
- Germany’s BaFin has imposed a €35,000 fine for past shortcomings in anti‑money‑laundering controls. [25]
Market reaction: shares at multi‑year lows
Investors focused firmly on the profit warning, not on the improved capital ratios. On the SIX, Leonteq shares collapsed by around 14–15% at one point, trading near CHF 13.10, according to finanzen.ch and AWP. [26]
- That leaves the stock down more than 40% in 2024 and adds to a multi‑year slide in the share price. [27]
- Bloomberg and other outlets describe the move as a plunge to record lows, underscoring how cautious the market has become over the firm’s earnings trajectory. [28]
Finews sums up the situation bluntly: Leonteq has strengthened its capital base and accelerated regulatory clean‑up, but normalised volatility has erased earlier hedging gains, leaving investors staring at “at least one more year of earnings volatility” before the company’s ROE‑focused strategy can plausibly deliver stable returns. [29]
For the broader Swiss market, Leonteq is not a heavyweight index component, but its collapse is a warning shot for the structured‑products and capital‑markets ecosystem, especially at a time when SIX is investing in extended trading hours and new segments for structured products. [30]
Corporate Headlines to Watch
Beyond Leonteq, a wave of company‑specific news coloured today’s trading landscape and sets up potential moves in the days ahead: [31]
- ABB – Took a stake in a specialist for data‑center cooling systems, reinforcing its positioning in the AI and digital‑infrastructure value chain.
- Galderma – Received a BBB rating from S&P, supporting its credit profile as it continues to build out its dermatology franchise.
- Nestlé Waters – Temporarily blocked around 4 million Perrier bottles due to quality‑control concerns, a reminder of operational and reputational risks even for blue‑chip consumer names.
- Swiss Re – Named Nicole Pieterse as the group’s new Chief People Officer, part of ongoing leadership optimisation.
- Also, Epic Suisse, Helvetia – Financing and capital‑markets actions (Schuldschein placement, equity placings) continue to reshape Swiss real estate and insurance balance sheets.
In addition, SIX is merging its clearinghouses and launching a new segment for structured products with extended trading hours, moves that could gradually deepen liquidity in Switzerland’s derivatives and structured‑products market — directly relevant for players like Leonteq. [32]
Macro Backdrop: Fed Cut Hopes and Swiss Data
Today’s Swiss session didn’t unfold in a vacuum. It was shaped by a global risk‑on mood driven mainly by US and Asian developments: [33]
- US ADP employment data showed private‑sector job losses, stoking expectations that the Federal Reserve will cut rates by 25 basis points next week.
- Futures markets now assign over a 90% probability to a December Fed cut, according to traders referenced by Swissquote and AWP. [34]
- Asian equities rallied, with Japan’s Nikkei 225 up more than 2%, and European equity futures turned higher as the global equity rally broadened beyond mega‑cap tech. [35]
For Switzerland specifically, a string of recent data points provides a supportive domestic backdrop:
- Swiss manufacturing PMI moved higher in November, edging closer to the 50‑point expansion threshold.
- The jobless rate remains near 2.9%, one of the lowest in Europe.
- Annual inflation has effectively flat‑lined around 0%, easing pressure on the Swiss National Bank (SNB). [36]
AWP’s morning briefing also flags a packed data calendar over the next few days: SECO labour‑market figures, the Swiss PMI, SNB foreign‑exchange reserves, and US indicators such as weekly jobless claims, trade data, and the Fed’s preferred PCE inflation measure. [37]
With EUR/CHF at roughly 0.93 and USD/CHF near 0.80, the Swiss franc remains firm but not dramatically stronger than in recent months, limiting currency headwinds for export‑oriented SMI members. [38]
Strategic and Technical Outlook for Swiss Equities
Short‑term technical picture
From a pure chart perspective, today’s close around 12,896 keeps the SMI: [39]
- Above key support around 12,843 points (the breakout level highlighted by BNP Paribas).
- Less than 2.5% below its all‑time high of 13,199 points.
- Up about 5% over the past month and roughly 11% year‑to‑date, according to MarketScreener performance data. [40]
BNP’s IndexMonitor still sees an intact uptrend with room to test — and potentially surpass — the record high as long as the index holds above the mid‑12,000s. [41]
Fundamental and medium‑term view
On the fundamental side, several themes stand out:
- European cyclical rebound
A fresh market report from Bellevue Asset Management argues that Europe is entering a cyclical upswing as macro indicators stabilise, PMI data bottom out, and the European Central Bank turns more accommodative. They highlight: [42]- Forecasts for euro‑area growth to accelerate toward 1–2% annualised by late 2026.
- European small and mid caps trading at historically low relative valuations (forward P/E around 13.6x vs 15.1x for large caps and nearly 19.6x for US small caps).
- Structural tailwinds from massive infrastructure and electrification investment, which particularly favours industrial and infrastructure suppliers — a sweet spot for Swiss names like ABB, Holcim and Sika.
- Index‑composition shifts
Index adjustments effective 22 December 2025 will see the newly merged Helvetia Baloise Holding enter the SLI, replacing Swatch Group’s “I” share, while Galenica re‑enters the SMIM and Dottikon moves up from SPI Small to SPI Mid. [43]
These changes may generate end‑of‑year flow effects as index funds and ETFs rebalance, potentially pressuring outgoing constituents and supporting incoming names. - Macro‑model forecasts
TradingEconomics’ macro models currently project the Swiss stock market index (CH20) at around 12,720 points by quarter‑end, roughly in line with current levels — implying limited near‑term upside but no sharp downturn. [44]
Put together, the backdrop suggests a late‑cycle but still constructive environment for Swiss equities: supportive macro, easing inflation, high but not extreme valuations, and strong balance sheets — especially among the blue chips.
What Investors Are Watching Next
Heading into the remainder of December, Swiss equity investors are likely to focus on several catalysts:
- Federal Reserve decision next Wednesday
– Confirmation of a December rate cut and guidance for 2026 will set the tone for global risk assets, including Swiss cyclicals and financials. [45] - US and Swiss inflation data (PCE and CPI)
– Any surprise re‑acceleration in inflation could challenge the “soft‑landing” narrative currently supporting equities. [46] - Swiss macro releases (labour market, PMI, SNB FX reserves)
– Signs of a sharper slowdown could cap the SMI near its current levels, while resilience would reinforce the case for new highs. [47] - Leonteq’s share‑price stabilisation (or lack thereof)
– Continued pressure would keep attention on regulatory and business‑model risks in Switzerland’s structured‑products space. A stabilisation, by contrast, would suggest investors are willing to give management time to execute its turnaround plan. [48] - Index rebalancing and Helvetia‑Baloise merger listing
– The new combined insurer’s debut and Swatch’s exit from the SLI could spark tactical flows in the final trading weeks of 2025. [49]
For now, though, the verdict from Zurich’s trading floor on 4 December is clear: the Swiss equity rally is still alive, cyclicals are back in favour, and the SMI’s record high is coming back into view — even if individual stories like Leonteq show that not every Swiss stock is sharing in the good news.
This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Investors should conduct their own research or consult a professional advisor before making investment decisions.
References
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