(AWP / RB) The share prices moved in the deep red area from Monday onwards. After the organization of oil-producing countries Opec failed to agree on a cut in production with the countries outside the cartel, the oil price has plummeted. This added a facet to the concern about the further development of the global economy.
The leading index SMI (SMI 9196.6 -5.55%) crashed around 7% in the first minutes. He then recovered quickly and reduced the minus to 3%, after which he was mostly back in the lower realms. In the end there is a loss of 5.5%. No help came from Wall Street – on the contrary. In New York, the main indices fell 7% at the beginning and triggered a freeze. After that, Dow Jones pointed (Dow Jones 23931.67 -7.47%) and S&P 500 (SP500 2758.14 -7.21%) (initially) losses of 5 to 6%.
In Switzerland, Nestlé (NESN 97.96 -3.14%), Novartis (NOVN 76.04 -4.07%), Givaudan (GIVN 2897 -4.33%) and SGS (SGSN 2293 -4.34%) best kept. The two major UBS banks were particularly hard hit (UBSG 8,842 -10.42%) and Credit Suisse (CSGN 8,548 -12.86%) and Zurich Insurance (Angry 334.7 -9.42%) and the economically sensitive LafargeHolcim (LHN 40.25 -8.69%) and Adecco (ADEN 42.76 -8.32%). The industrial value ABB (ABBN 18.16 -7.44%), who had been among the biggest losers for most of the day, ended trading a little higher on the SMI list.
The online travel marketer LM Group leads the market (L M N 27 -15.36%) and the operator of duty-free shops Dufry (DUFN 49.8 -13.69%) together with the crystal manufacturer Lalique (LLQ April 28 -17.92%) the losers. But also Sulzer (SUN 70.3 -9.87%), which is active in the oil business, declined sharply. Technology titles like Inficon (IFCN 575 -11.47%) or Klingelnberg (KLIN 16.02 -10.7%) fell as well as the pharmaceutical and medtech stocks Cassiopea (SKIN 32.5 -11.92%), Ypsomed (YPSN 117.8 -11.03%), BB Biotech (BION 52.1 -11.02%), Newron (NWRN 4.86 -10.83%) or Kuros Biosciences. Tornos (TOHN 4,915 -6.56%), which had reported falling sales with the annual figures, were able to slightly reduce their initial loss of more than 10%. Belimo, which reported on a strong financial year, gave way significantly less.
Down in Europe and Asia
In the rest of Europe, the picture was similar to that in Switzerland, except that Euro-Stoxx 50, Dax (DAX 10625.02 -7.94%) and Cac 40 fell even more than the SMI, in which defensive stocks are very important. In London, the FTSE 100 lost more than 7%.
The courses had previously crashed in Asia. In doing so, they seamlessly build on the levies of the past week, which had also increased again at the end of the week. At the same time, the flight to safe havens is causing gold prices to rise and interest rates on US government bonds to fall further. The flight to secure investments is also noticeable on the foreign exchange market. Both the franc and the Japanese yen are under pressure to appreciate.
Oil price war exacerbates panic
The trigger for the intensification of the sell-off is the news that the Opec oil cartel and its cooperation partners were unable to agree on a further restriction on crude oil production. (Read more here.) Saudi Arabia and Russia have launched a price war that sent oil prices down about 30% on Monday.
Both the North Sea variety Brent and US light oil experience the biggest slump since January 1991 at the beginning of the first Gulf War. Brent was trading at just under $ 32 on Monday morning, the WTI grade around $ 30. By evening, the courses recovered to $ 36 and $ 33.
The latest economic data from China and Japan exacerbate the panic in the markets. The price of a troy ounce of gold (gold 1673.94 0.02%) has since risen to more than $ 1,700. US government bonds were also in demand, meaning that the yield on ten-year US bonds fell below the 0.5% mark for the first time.
Investors are also looking for safe havens on the foreign exchange market. In addition to the Japanese yen, they are betting on the franc. The euro was trading below CHF 1.6 in the morning and then slightly above. The dollar was trading at less than CHF 0.93. For comparison: on Friday evening the euro cost CHF 1.0603 and the dollar CHF 0.9369.
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