(RTTNews) - The Switzerland stock market ended notably lower on Thursday, weighed down by data showing the country's economy contracted at a record pace in the second quarter.
Rising tensions between the U.S. and China too contributed to the negative sentiment in the market.
The market also digested U.S. Federal Reserve Chairman Jerome Powell's speech which outlined historic changes to Fed's monetary policy strategy.
The benchmark SMI, which slipped into the red after edging higher in opening trades, emerged into positive territory again later on in the session, but failed to find support and ended down 69.19 points or 0.67% at 10,240.46. The index touched a high of 10,331.43 in the session.
Roche Holding shares ended down 1.6%. Sika, ABB, Givaudan and LafargeHolcim all ended lower by nearly 1.5%.
Swiss Re shed about 1.1%, while Lonza Group, Zurich Insurance Group, Adecco, Credit Suisse and Alcon shed 0.5 to 0.85%. Richemont and Novartis closed modestly higher.
In the midcap section, Swiss Prime Site shed 2.37%. BB Biotech ended nearly 2% down, while AMS, Logitech, OC Oerlikon Corp and Bucher Industries lost 1.2 to 1.4%.
On the other hand, Dufry gained about 3.15% and Dorma Kaba Holding moved up 1.1%. Barry Callebaut, Flughafen Zurich and Temenos Group also ended on a firm note.
According to the report from the State Secretariat for Economic Affairs, or SECO, Switzerland's gross domestic product fell 8.2% sequentially in the second quarter after falling 2.5% in the previous quarter. The contraction was the sharpest since 1980.
However, the decline was smaller than economists' forecast for an 8.6% contraction.
Compared to the situation in the fourth quarter, before the coronavirus crisis, GDP slumped by a total of 10.5% in the first half of 2020.
On a yearly basis, GDP declined 9.3% in the second quarter versus a 0.7% drop in the first quarter and economists' forecast of -9.6%.
Manufacturing output plunged 9% amid sharper falls in machinery and metals, precision instruments and watch-making.
The service sector was hit hardest by the health policy measures taken to contain the pandemic, data revealed.
In the second quarter, accommodation and food output plunged 54.2% and trade dropped 3.6%. Finance and insurance declined 2% and business services slid 8.6%, the data showed.
Exports of goods decreased 9.4% and that of services plunged 15.9%, while imports of goods decreased 14.3% and that of services slid 22.2% in the second quarter.
Federal Reserve Chair Jerome Powell today announced a widely expected shift with regard to the price-stability side of the central bank's dual mandate.
During a live-streamed speech to the Jackson Hole economic symposium, Powell said that the Fed will change its approach to a "flexible form of average inflation targeting."
The Fed chief stressed that the longer-run goal continues to be an inflation rate of 2% but noted inflation will average less than that if it runs below 2% following economic downturns and never moves above that level even when the economy is strong.
Powell said appropriate monetary policy will therefore likely aim to achieve inflation moderately above 2% following periods when inflation has been running below that level.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.