Switzerland's companies warned of a plunge in exports, tourist revenues and profits after the country's central bank scrapped its cap on the Swiss franc, sending the currency soaring up to 30pc and crushing their competitiveness in world markets.
Analysts said the country's renowned watchmakers and luxury goods companies, including Swatch and Richemont , were likely to be the biggest casualties, with the starkest mismatch between revenues abroad and costs at home.
Other Swiss blue-chips, such as food group Nestle, engineer ABB and drugs firms Novartis and Roche, would be better protected by their operations in local markets around the world, they said.
But all would be affected to some degree by what the head of brokerage Kepler Cheuvreux described as "a terrible day for corporate Switzerland".
"We can expect a wave of profit warnings from Swiss companies," said Pascal Bernachon, strategist at Paris-based private bank KBL Richelieu.
Faced with the prospect of a massive bond-buying scheme by the European Central Bank that might have forced it to intervene repeatedly in foreign exchange markets, the Swiss National Bank (SNB) abandoned its three-year cap on the franc against the euro on Thursday, stunning markets.
Frantic trading slashed about $100 billion off the value of Switzerland's blue-chip stocks, their biggest one-day fall on record, in what some traders described as "carnage".
The benchmark SMI index slumped as much as 13 percent, with Swatch, Richemont and biotech firm Actelion among the biggest losers, down 14 to 17 percent.
Swiss exports account for about one-third of gross domestic product (GDP), led by chemicals and pharmaceuticals, precision instruments, clocks and watches and jewellery, and machines, appliances and electronics.
The country's biggest trading partner is the European Union, outside of which it has consistently voted to remain, led by Germany. The second-biggest is the United States. Tourism is also a major part of the economy, contributing about 3 percent of GDP and employing 5 percent of the labour force in the hotel and restaurant industries, mostly in small and mid-sized firms.
The central bank's decision comes as the ski season in the Alpine nation gets into full swing, and a week ahead of the World Economic Forum, the annual meeting of the world's political and business elites in the Swiss ski resort of Davos.
Nick Nelson, head of global and European equity strategy at UBS, said the surge in the franc made the already expensive Swiss stock market even less attractive to foreign investors.
"Even if you sector-adjust the Swiss market and give it the same sector mix as the MSCI world index it's still pretty much one of the most expensive European countries at just over 14 times forward earnings compared to say 11 times for Germany."
"Clearly this is going to be an additional headwind," he said, although for some investors already owning Swiss shares, the currency rise my offset the stock price falls for now.
"MADE IN SWITZERLAND"
The surge in the franc means the "Made in Switzerland" tag used by luxury companies as a mark of quality to drive sales in foreign markets is no longer such an advantage.
"Swatch, Richemont and other luxury players will find it difficult," said Neil Wilkinson, European fund manager at Royal London Asset Management, talking about the firms most exposed.
"To negate that risk going forward, then ultimately you need to move your cost structure to a different geography. But that's easier said than done. For Swatch, your unique selling point is the fact you're selling a Swiss watch, and most people will want their Swiss watch to be manufactured in Switzerland."
That contrasts with firms such as Nestle, Novartis, Roche, Syngenta, Credit Suisse and UBS, whose revenues and costs are largely in the same currencies.
Roche, which has around 17 percent of its operating expenses in Swiss francs, said its wide spread of costs and revenues would mitigate the impact of the surge in the franc. Novartis had 12 percent of its costs in francs in 2013.
Chemicals companies Clariant and Syngenta with only 4-5 percent of their costs in francs, would be minimally affected, Baader Bank analyst Markus Mayer said, while Nestle also has less than 5 percent of its costs in francs, according to James Targett at Berenberg.
Citigroup analysts estimated the potential negative impact for Richemont's earnings in the mid- to high-single-digit percentage range in 2015 and 2016, though it would likely be mitigated by gold prices, pricing power and more cost cuts.
For Swatch, they said the surge in the franc could cost it 8-10 percent of its earnings, noting that the watchmaker did not hedge currency risk.
"Words fail me!" said Swatch CEO Nick Hayek. "Today's SNB action is a tsunami for the export industry and for tourism, and finally for the entire country."
The Swiss Federation of Trade Unions said the SNB's decision "massively endangers wages and jobs in the export industry and raises the risk of deflation in Switzerland".
Gary Paulin, co-founding partner of equity brokerage Aviate Global, pointed to repercussions for companies outside Switzerland, including airlines that fly to Swiss skiing resorts such as Ryanair.
The Swiss National Bank (SNB) shocked financial markets today by scrapping a three-year-old cap on the franc, sending the safe-haven currency soaring through the 1.20 per euro limit and stoking fears about the export-reliant Swiss economy.