Swiss stocks advanced as gains among food companies and watchmakers offset concerns that the almost $1 trillion lending plan to bail out indebted nations in Europe won’t avert a slowdown in the region.
Nestle SA (NESN), the world’s largest food company rose 2.2 percent. Swatch Group AG and Compagnie Financiere Richemont SA both advanced more than 1.2 percent. Credit Suisse (CSGN) Group AG, Switzerland’s second-biggest bank, led financial shares lower.
The benchmark Swiss Market Index (SMI) of the largest and most actively traded companies gained 27.05, or 0.4 percent, to 6,509. The gauge surged the most since March 2009 yesterday after the European Union and International Monetary Fund unveiled a 750 billion-euro ($954 billion) financial assistance package and the European Central Bank said it will purchase government and private debt to stop the region’s sovereign debt crisis. The broader Swiss Performance Index (SPI) also rose 0.4 percent today.
The SMI is still down 6.6 percent from this year’s high on April 15 amid concern that a previously announced 110 billion-euro assistance program for Greece would be insufficient to keep Europe’s most indebted nations from defaulting. Greece may have its credit rating lowered to junk within the next month, Moody’s said late yesterday, citing the country’s “dismal” economic prospects.
Nestle, which accounts for 24 percent of the SMI by weighting, advanced 2.2 percent to 52.65 Swiss francs. Food and beverage companies were the best performers among 19 industry groups in the Stoxx Europe 600 Index.
Swatch rose 1.4 percent to 318.3 francs. The world’s biggest watchmaker said will merge its Frederic Piguet SA component making unit into its Blancpain brand.
Richemont, the world’s largest jewelry maker, climbed 1.3 percent to 40.25 francs.
Credit Suisse retreated 1 percent to 47.89 francs. Swiss Life Holding AG (SLHN), the country’s biggest life insurer, slipped 0.8 percent to 126.1 francs.
European financial companies hold more than 61 billion euros in Greek and Portuguese sovereign debt, the worst-performing European government bonds so far this year. The companies also hold more than 73 billion euros in Spanish government bonds, according to figures provided to Bloomberg News in interviews and e-mails, or culled from company reports and presentations.
Addex Pharmaceuticals Ltd. (ADXN) climbed 8.8 percent to 13.05 francs. The drugmaker hosted a research and development day today and disclosed the financial terms of its schizophrenia deal with Ortho-McNeil-Janssen Pharmaceuticals Inc. Addex may receive up to 112 million euros and is eligible for low double-digit royalties on sales of the ADX71149 treatment.
Lifewatch AG (LIFE) declined 4.4 percent to 13 francs. The maker of medical equipment used to monitor cardiac patients remotely said first-quarter sales fell to $22.39 million from $28.04 million a year earlier.
Tornos SA (TOHN) retreated 2.3 percent to 8.45 francs. Europe’s biggest maker of lathes for the watch industry said first-quarter sales fell 19 percent to 25.8 million francs ($23.3 million) from a year earlier.
To contact the reporter on this story: Daniela Silberstein in Zurich at email@example.com.