Swiss Equities Slide as U.S.-Iran Military Escalation Sparks Oil Supply Fears

The Swiss Market Index (SMI) closed significantly lower on Monday, reflecting a broader global retreat in equities as tensions between the United States and Iran escalated into direct military confrontations. The market volatility follows the U.S. seizure of an Iranian vessel near the strategically critical Strait of Hormuz, which prompted Tehran to launch drone attacks against U.S. military ships. Diplomatic efforts to stabilize the region have stalled after Iran refused to participate in a second round of peace negotiations. Iranian officials cited unrealistic U.S. demands and the ongoing naval blockade as primary reasons for the breakdown in talks, characterizing the blockade as a breach of the ceasefire. The SMI fell by 142.50 points, or 1.06%, to finish at 13,284.22, having touched an intraday low of 13,200.18. Heavy losses were concentrated in industrial and consumer staples; Sika and Lonza Group both declined approximately 3.2%, while Nestle and Geberit dropped between 2.7% and 3%. Other major components including Holcim and Givaudan fell between 2% and 2.5%, and UBS Group saw a decline of up to 1.7%. Conversely, some defensive sectors showed resilience amid the turmoil; Swisscom rose 1.54%, and insurance firms including Zurich Insurance and Swiss Re posted modest gains between 0.6% and 1%.