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Swiss Stocks Retreat; Roche Shares Decline as UBS, Credit Suisse Advance
Stocks in Switzerland retreated as a fall in health-care shares outweighed a rise in financials after most of Europe’s banks passed stress tests, lifting confidence in the industry.
Roche Holding AG fell 1.4 percent as analysts said the company’s presentation last week left investors without sufficient clarity. Swiss banks Credit Suisse Group AG and UBS AG rose 0.3 percent and 0.8 percent, respectively.
The benchmark Swiss Market Index fell 0.5 percent to 6,169.04 at 3:26 p.m. in Zurich, paring three days of gains. The SMI has retreated 11 percent from this year’s high on April 15 amid speculation that Europe’s debt crisis may derail the economic recovery and concern that Chinese authorities are cooling their nation’s rate of growth. The broader Swiss Performance Index dropped 0.4 percent today.
“Roche is likely to struggle after a management presentation that provided little clarity on pipeline and restructuring issues last Thursday after its first-half earnings,” Emmanuel Papadakis, an equity analyst for Collins Stewart Plc, said today in an interview. “We still believe Roche faces significant headwinds. It looks like investors have had enough of pharmaceuticals today.”
Roche, the world’s biggest maker of cancer drugs, fell 1.4 percent to 134.5 francs, heading for the lowest close since March 2009. Novartis AG, the maker of the Diovan hypertension drug, lost 1.5 percent to 51 francs, dropping the most in over three weeks.
Stress Tests
European regulators found that seven of the 91 banks subject to evaluations need to raise a combined 3.5 billion euros ($4.5 billion) of capital. Germany’s Hypo Real Estate Holding AG, Agricultural Bank of Greece SA and five Spanish savings banks didn’t have adequate reserves to maintain a Tier 1 capital ratio of at least 6 percent in the event of a recession and sovereign-debt crisis, lenders and regulators said after the close of European trading on July 23.
Switzerland’s biggest banks, including UBS and Credit Suisse, passed stress tests that included a slump in financial markets and “very sharp shocks,” the country’s financial regulator said July 23.
UBS, Europe’s largest bank by assets, rose 0.8 percent to 15.6 francs, set to reach its highest price since June 22. Credit Suisse, Switzerland’s second-biggest bank, gained 0.3 percent to 44.47 francs, its second rise.
Nestle SA, the world’s biggest food company that makes up 25 percent of the SMI’s weighting, slipped 0.8 percent to 53.25 francs, the biggest intraday fall in a week.
Transocean Ltd., the owner of the Deepwater Horizon offshore rig which sank in April, retreated 1.6 percent to 48.54 francs, its lowest price since at least April 21.
To contact the reporter responsible for this story: Adam Ewing in Stockholm at aewing5@bloomberg.net.
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