Research Market strategy
By Swissquote Analysts
Published on 26.06.2023
Morning news

GSK Stock Climbs on Zantac Settlement. Drug Maker Avoids a California Trial

Topic of the day

U.S.-listed shares of GSK were rising Friday after the pharmaceutical company said it reached a first legal settlement over claims that heartburn medication Zantac can cause cancer. GSK, the British pharmaceutical company, didn’t give any financial details of its settlement with plaintiff James Goetz, but the agreement means it will avoid a scheduled trial in California in July. Analysts at Citi said the settlement took one of the strongest cases against GSK off the table and created a precedent that could help with future cases “GSK does not admit any liability in this settlement and will continue to vigorously defend itself based on the facts and the science in all other Zantac cases,” the company said in a statement. American depositary receipts of GSK rose 5.4% in premarket trading on Friday. The settlement brings GSK into line with fellow pharmaceutical companies Pfizer (PFE) and Sanofi (SNY), which also settled lawsuits with Goetz last year. The Zantac allegations last year wiped tens of billions in value from the involved pharmaceutical companies and thousands of cases are still working their way through state courts.

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Swiss stocks

The Swiss stock market ended modestly higher on Friday, recovering well after very nearly falling into negative territory in late afternoon trades. The benchmark SMI, which opened slightly lower, ended with a gain of 37.80 points or 0.34% at 11,221.22, more than 40 points off the session's high of 11,263.74. Givaudan surged nearly 1.5% and Sika gained about 1.2%. Swisscom, Swiss Re, Zurich Insurance Group, Novartis, Sonova, Kuehne & Nagel, Geberit and Roche Holding ended higher by 0.6 to 1%. Partners Group ended 2.13% down. Richemont fell 1.38%, while UBS Group and ABB lost 0.62% and 0.46%, respectively. In the Mid Price Index, DocMorris lost nearly 4%. AMS ended lower by 2.86%, while Temenos Group and Dufry closed lower by 1.45% and 1.05%, respectively. Meyer Burger Tech surged 3.45%. Schindler Holding, SIG Combibloc and Schindler Ps gained 1.2 to 1.5%. Lindt & Spruengli, Galenica Sante, SGS and Straumann Holding posted moderate gains. Data from the Swiss National Bank showed Switzerland's current account surplus narrowed to CHF 16 billion in the first quarter of 2023 from CHF 20.9 billion in the same period of the previous year.

International markets


European stocks closed lower on Friday, extending recent losses, as interest rate hikes by several central banks, and some disappointing economic data weighed on sentiment. The Bank of England, the European Central Bank, Norges Bank and the Swiss National Bank, have all raised interest rates, and some of these banks have signaled more hikes in the coming months. The pan European Stoxx 600 ended 0.34% down. The U.K.'s FTSE 100 ended lower by 0.54%, Germany's DAX tumbled 0.99% and France's CAC 40 drifted down 0.55%. Switzerland's SMI bucked the trend and gained 0.34%. Among other markets in Europe, Austria, Belgium, Denmark, Finland, Ireland, Netherlands, Norway, Poland, Portugal, Russia, Spain and Sweden ended with sharp to moderate losses. Czech Republic edged up marginally, while Greece, Iceland and Turkiye closed higher. In the UK market, Ocado Group ended 5.32% down. Smith (DS), IAG, Persimmon, JD Sports Fashion and Anglo American Plc declined 3 to 4.2%. Glencore, Frasers Group, Antofagasta, Barratt Developments, Whitbread, Segro, Rio Tinto and Bunzl also ended sharply lower. In the German market, Siemens Energy plunged more than 37%. The German company, which supplies equipment and services to the power sector, withdrew its profit guidance for fiscal year 2023 due to Siemens Gamesa citing a substantial increase in failure rates of wind turbine components. Commerzbank lost nearly 6%. Infineon shed almost 4%. Adidas, Sartorius, Siemens, Vonovia, Porsche, Deutsche Bank, Continental and RWE lost 1 to 2.5%. Fresenius Medical Care rallied about 3.25%. MTU Aero Engines, Symrise, Covestro, Siemens Healthineers, Deutsche Boerse and Henkel gained 1 to 1.7%. In Paris, Eurofins Scientific lost about 3%. STMicroElectronics, Kering, WorldLine, BNP Paribas, Credit Agricole, Veolia, Vinci, Unibail Rodamco and LVMH lost 1 to 2.5%.

United States

U.S. stocks fell Friday to end the week in the red, snapping winning streaks for the major indexes. The tech-heavy Nasdaq Composite lost 1% and the S&P 500 fell 0.8%. The Dow Jones Industrial Average dropped 219 points, or 0.6%. All three indexes posted losses for the week, ending eight straight weeks of gains for the Nasdaq and a five-week streak of gains for the S&P 500. Investors pointed to economic data that showed the global economy is cooling and policy moves that could tip it into a recession. Several overseas central banks raised interest rates this week, and Federal Reserve Chair Jerome Powell told Senate lawmakers that the central bank's inflation-fighting campaign likely isn't over. Chip stocks underperformed after surging this year on investor enthusiasm over artificial intelligence. The PHLX Semiconductor Sector Index fell 4.5% for the week, including a 1.8% drop on Friday. Nvidia, the best-performing stock in the S&P 500 this year, fell 1.9% on Friday, while Advanced Micro Devices fell 0.6%. CarMax shares advanced 10% to close at their highest level since September, after the used-car retailer reported better than expected earnings. 3M shares rose 0.4% after the company agreed to pay up to $12.5 billion to settle hundreds of lawsuits brought by cities that said their drinking water was contaminated.


The East Asian stock exchanges are not showing any consistent trend at the beginning of the new trading week. Economic worries continue to be the main reason for investors' caution. In the Chinese heartland, the Shanghai Composite is down 0.7 per cent. This is the first time since last Wednesday that it has been traded here. This continues the recent losing streak.


U.S. Government bond prices rose and yields fell. The yield on the U.S. 10-year Treasury note fell to 3.737%, from 3.797% on Thursday. Oil prices continued their recent slide on fears of a slowing economy. Brent crude futures settled at $73.85 per barrel, down 0.4% on Friday and 3.6% for the week.


UBS lowers the Givaudan target to CHF 2,800 (2,820)/Sell – Trader

SocGen raises Puma to Buy (Hold)/Target EUR 65 (61) – Trader

Deutsche Bank lowers the National Grid target to 1,050 (1,080) p – Hold

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