Swiss Equities Outperform European Peers in October Rally

The Swiss Market Index (SMI) outperformed its European counterparts in October 2026, recording a 4.6% gain while the Euro Stoxx 50 fell by 3.2%. This represents the strongest relative performance for Swiss stocks since March 2020, pushing valuations to their highest premium over eurozone peers in nearly two years.

The rally was driven by a flight to defensive companies as investors retreated from crowded artificial intelligence positions and managed higher borrowing costs and political uncertainty. The growth was concentrated in three major firms: pharmaceutical companies Roche and Novartis, and food giant Nestlé, which together accounted for the index's entire monthly increase. Roche shares climbed 12%, Nestlé gained 10%, and Novartis advanced 6.7%. Other beneficiaries included Givaudan and Galderma.

This recovery follows years of underperformance caused by Switzerland's limited exposure to the technology and energy sectors. Market sentiment shifted this month, with J. Safra Sarasin upgrading Swiss equities to outperform. Additionally, a Bank of America fund manager survey indicated that 16% of respondents now prefer the Swiss equity market over other options.