LIVE MARKETS-Swiss bulls charge on defensive plays

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SWISS BULLS CHARGE ON DEFENSIVE PLAYS

Swiss stocks have been on a tear this year, trading around record highs as investors seek refuge in the country's high-profile defensive stocks during an uncertain time for the global economy.

The Swiss blue-chip index .SSMI has gained 13% for the year through Monday's close, outpacing the pan-European STOXX 600 index .STOXX, which is up about 10% so far.

The Swiss index, which is dominated by healthcare stocks, has very little weightage of technology companies, making it less vulnerable to global economic headwinds.

This is in contrast to Wall Street, where declines in tech heavyweights and tariff worries have pulled the S&P 500 .SPX down 0.5% year-to-date.

"Defensive stocks are more attractive now in 2025," said Arthur Jurus, head of investment office at lender ODDO BHF Switzerland, adding defensive plays hadn't performed well in the last year, and "what you're observing now is just catch-up".

Jurus added that the Swiss index consists of stocks with high levels of cash, which provide strong earnings even during economic downturns.

Index heavyweights Nestle NESN.S gained 19.8%, Roche ROG.S jumped 18.7%, Novartis NOVN.S advanced 12.3% and UBS UBSG.S was up 8.4% this year.

Switzerland's export-oriented economy, traditionally one of the most robust in Europe, has been improving from last year's slowdown. It grew by a better than expected 0.5% in the fourth quarter.

The country's luxury sector also remains less immune to economic headwinds, with consumers willing to pay top prices for Swiss watches and jewellery, Jurus said.

"Swiss (luxury) exports ... are very competitive in terms of market positioning," Jurus said.

Richemont CFR.S, owner of jewellery company Cartier, has gained about 34% this year, the biggest gainer on the Swiss Market index.

Still, the sustainability of the current bull market is under doubts as prospects of escalating global trade war may trigger a pullback.

(Nikhil Sharma)

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