BRUSSELS (dpa-AFX) - The Switzerland market ended on a firm note on Thursday, after the Swiss National Bank lowered its key policy rate by 25 basis points for the second consecutive meeting, citing easing underlying inflationary pressures.
The benchmark SMI, which spent a few minutes in the red early on in the session, and saw another brief spell in negative territory around mid afternoon, ended the day with a gain of 67.92 points or 0.56% at 12,128.16.
SGS gained about 2.3%. Partners Group climbed 2.12%, and SIG Group advanced nearly 2%.
Sonova, Alcon, Swiss Re, Straumann Holdings, Lonza Group, Sika, Julius Baer, Schindler Ps, Geberit, Givaudan, UBS Group, Lindt & Spruengli and Swiss Life Holding ended higher by 1 to 1.8%.
Swatch Group drifted down 1.6%. Kuehne & Nagel and Richemont both ended lower by nearly 1%.
SNB's policy board headed by Thomas Jordan decided to cut the policy rate to 1.25% from 1.5%. The bank had unexpectedly reduced its rate by a quarter point at the March meeting and became the first major central bank to ease the policy in the current cycle.
Banks' sight deposits held at the central bank will be remunerated at the SNB policy rate up to a certain threshold, and at 0.75% above this threshold, the bank said today.
'With today's lowering of the SNB policy rate, the SNB is able to maintain appropriate monetary conditions,' the bank said. The SNB repeated that it is willing to be active in the foreign exchange market as necessary.
The bank trimmed the inflation outlook to 1.3% this year from 1.4%, and lowered the projection for 2025 to 1.1% from 1.2%. The outlook for 2026 was reduced to 1% from 1.1%.
Regarding economic growth, the SNB said gross domestic product is set to grow around 1% this year. Unemployment is likely to continue to rise marginally and the utilization of production capacity is expected to decline slightly.
For next year, the bank projected economic growth of around 1.5% supported by somewhat stronger demand from abroad.
Data from the Federal Statistical Office showed Switzerland's foreign trade surplus increased in May to CHF 4.1 billion from CHF 3.8 billion a month earlier. In real terms, exports declined 3.5% over the month, reversing a 7% drop in March. Imports fell 4.3% after rising 3.2% in the prior month.
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