Swiss Stocks Retreat; Roche Shares Decline, Xstrata Advances in Zurich

Swiss stocks fell for a second session on concern a 110 billion-euro ($145.5 billion) rescue package for Greece won’t contain Europe’s debt crisis.

Roche Holding AG lost 1.8 percent after Handelsblatt reported the drugmaker’s biggest-selling medicine is “marginally effective.” Lifewatch AG sank 26 percent after predicting a loss before interest and tax in the first quarter. Xstrata Plc advanced 4.2 percent as Glencore International AG is studying a merger with the world’s fourth-largest copper producer as a way to restructure its ownership and improve access to capital. Swatch Group AG gained 2 percent after its retail partner in China said sales will probably grow at least 30 percent this year.

The Swiss Market Index, a gauge of the biggest and most actively traded companies, declined 9.11, or 0.1 percent, to 6,607.71 in Zurich. The benchmark index for Swiss equities has still gained more than 50 percent from a six-year low in March 2009 as the global economy emerged from recession. The broader Swiss Performance Index dropped 0.3 percent to 5,830.74 today.

Euro-region ministers agreed on a rescue package for Greece to prevent a default and stop the worst crisis in the currency’s 11-year history from spreading through the rest of the bloc.

The first payment will be made before Greece’s next bond redemption on May 19, Luxembourg’s Jean-Claude Juncker said after chairing a meeting of euro-region finance ministers in Brussels yesterday. The 16-nation bloc will pay 80 billion euros at a rate of around 5 percent and the International Monetary Fund contributes the rest. Greece agreed to budget measures worth 13 percent of gross domestic product.

Credible Package

“For a financial aid package to work, it is not so much the size of the package that matters. Of course, the bigger the package the better,” Daniele Antonucci and Elga Bartsch, London-based economists at Morgan Stanley, said in a research note dated May 2. “The key is to boost investor confidence by sounding fiscally credible, in order to attract private investors’ capital.”

Roche dropped 1.8 percent to 167.1 francs. Tumor-fighting Avastin, the drugmaker’s biggest-selling medicine, is “marginally effective,” Handelsblatt reported, citing an report by an adviser to Germany’s public health insurers.

Avastin’s additional benefits bear no relation to the 5,000-euro monthly cost, Handelsblatt said, citing the report. Roche rejected the conclusions, according to Handelsblatt.

Novartis AG, the drugmaker that accounts for about 17 percent of the SMI by weighting, fell 0.5 percent to 54.75 francs.

Lifewatch plummeted 26 percent to 13.25 francs. The Swiss maker of medical equipment used to monitor cardiac patients remotely said it expects a first-quarter loss before interest and tax of about $4 million.

Xstrata gained 4.2 percent to 18.65 francs. Glencore International AG, the world’s largest commodity trader, is studying a merger with Xstrata to create a mining company with operations on six continents, according to two people familiar with the matter.

Glencore, which already owns 34 percent of Xstrata, is also considering an initial public offering, said the people who declined to be identified because the talks are confidential. No agreement is imminent, the people said. Marc Ocskay, a spokesman for Glencore, and Xstrata spokeswoman Claire Divver both declined to comment.

Swatch gained 2 percent to 324.2 francs. Hengdeli Holdings Ltd., the retail partner of Swatch in China, said 2010 sales growth may be the fastest in three years as it expands market share and Chinese consumers splash out on luxury watches and jewelry.

Sales of Hengdeli will probably expand by at least 30 percent this year, Chairman Zhang Yuping said April 30 in an interview in Hong Kong.

To contact the reporters on this story: Francesca Cinelli in Milan at fcinelli@bloomberg.net; Antonio Ligi in Zurich at 4116 or aligi@bloomberg.net

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