Watches of Switzerland Shares Soar 8% Despite U.S. Tariffs, Deutsche Bank Upgrades Stock
European stocks opened higher on Wednesday, reversing losses from the previous session as investors gained confidence amid ongoing fiscal concerns across the region. By 10:30 a.m. London time, the pan-European Stoxx 600 was up 0.6%, with all major bourses and most sectors posting gains. Key indices, including the FTSE 100, DAX, and CAC 40, showed positive momentum as traders digested mixed signals from the global bond and trade markets.
A standout performer in early trade was Watches of Switzerland, whose shares jumped 8% following a trading update and a Deutsche Bank upgrade. The luxury watch retailer confirmed it remains on track to meet first-half financial expectations despite the implementation of massive U.S. tariffs on Swiss imports. Analysts and investors were encouraged by the company’s strong performance in the U.S. and stable trading in the U.K., which helped offset tariff concerns.
In its trading update, Watches of Switzerland highlighted that brand partners had increased inventories, mitigating potential tariff impacts. Swiss Watch Exports in July 2025 surged 45% year-on-year, signaling robust demand. The company emphasized that it does not anticipate material effects from the U.S. tariffs in the first half of fiscal year 2026, underscoring resilience in the luxury market.
Deutsche Bank reinforced investor confidence by upgrading the stock to “buy,” noting that the downside risk from U.S. import tariffs was likely overestimated. “Demand for non-supply-constrained brands in the U.S. represents a smaller portion of gross profit than widely assumed,” said analyst Alison Lygo, explaining why Watches of Switzerland’s earnings outlook remains strong.
The upbeat trading comes after European stocks fell sharply on Tuesday amid heightened fiscal uncertainty. Bond yields rose across major economies, with the U.K.’s 30-year bond reaching its highest level since 1998 and France’s 30-year yield hitting a 2009 high. Meanwhile, U.S. markets monitored ongoing trade disputes and regulatory developments, including a court ruling on Alphabet’s antitrust case, which fueled cautious optimism among investors worldwide.
Source: Cnbc