The Swiss Stock Market Pulled Back On Recession Forecast

(RTTNews) - The Swiss stock market closed Wednesday firmly in the red, after a weak performance by its defensive heavyweights. Investor sentiment continued to be negatively impacted by concerns over the situation in Greece. Investors also remained cautious ahead of the policy statement from the Federal Reserve later today. A forecast for a Swiss recession also contributed to the negative mood.

Greek Prime Minister Alexis Tsipras held his first cabinet meeting with the new government today. Tsipras reiterated his intention to re-negotiate the country's debt repayment with international creditors and his plans to increase the Greek minimum wage.

Switzerland's economy is set to contract this year owing to the 'franc-shock' and falling oil prices, the KOF Swiss Economic Institute said Wednesday. The Zurich-based think-tank slashed the growth projection for this year to -0.5 percent from 1.9 percent seen in December. The forecast for next year was cut to zero from 2.1 percent.

Growth was estimated at 2 percent for 2014, a tad above the December projection of 1.9 percent. "The Swiss economy is expected to experience a short recession in the summer semester of 2015," KOF said.

The Swiss Market Index declined by 1.09 percent Wednesday and finished at 8,300.37. The Swiss Leader Index dropped by 0.93 percent and the Swiss Performance Index fell by 0.98 percent.

Shares of Roche dropped by 2.2 percent, after the pharma giant's full year results disappointed investors. The company's outlook was also views as relatively conservative.

Novartis dipped by 0.2 percent. However, the stock was up over 2 percent yesterday, following its better than expected fourth quarter report. Shares of Nestle also decreased by 1.4 percent Wednesday.

Financial stocks also turned in a weak performance. Credit Suisse declined by 1.2 percent and UBS dropped by 2.0 percent. Julius Baer also finished with a loss of 1.7 percent.