Swiss stocks gained as debt sales by Ireland and Spain eased concern that Europe faces a renewed sovereign debt crisis, while reports in the U.S. signaled that the economic recovery is intact.
Holcim Ltd. (HOLN) rose 2.7 percent, following construction shares higher. Schindler Holding AG (SCHN) advanced 2.6 percent after it lifted its full-year earnings forecast. OC Oerlikon Corp. AG (OERL) surged 3.4 percent as it predicted a profit next year. Galenica AG (GALN) jumped 2.1 percent after reporting increased first-half net income. Swisslog Holding AG (SLOG) sank 2.4 percent after saying that order intake and net sales in the first half were slightly less than a year earlier.
The benchmark Swiss Market Index (SMI) advanced 1.2 percent to 6,359.74 at the 5:30 p.m. close in Zurich. The SMI has risen 7 percent since this year’s low on July 5 as concern abated that efforts by European governments to scale back spending may tip the economy back into recession. The broader Swiss Performance Index (SPI) also gained 1.2 percent today.
“Positive news flow stemming from bond auctions, mainly in Ireland, is helping European equity markets,” said Nicola Trivelli, who helps manage about 3 billion euros ($3.9 billion) as chief investment officer of Sella Gestioni Sgr in Milan. “Still, we remain cautious as the global scenario is uncertain and the next two quarters are expected to be less interesting in terms of growth.”
Credit Suisse Private Banking upgraded the SMI to short-term positive today.
“The fact that the SMI managed to stay above the 6,200 mark for a third day underlines that bulls are slowly but surely taking the upper hand again,” Zurich-based analyst Raphael Wilhelm wrote in a note.
Irish securities climbed as the nation sold 1.5 billion euros of bonds today. Spain auctioned 5.5 billion euros of 12-and 18-month bills, the total amount of debt it wanted to auction, as higher demand drove down borrowing costs.
In the U.S., a report showed production rose more than forecast in July, easing concern the industry that led the economy out of the recession is beginning to slow.
A separate report showed that housing starts rose less than forecast in July and building permits fell to the lowest level in more than a year.
“It is no surprise given the expiration of the homebuyers’ tax credit and high unemployment rate that housing is performing poorly,” Semmens wrote. “We expect housing to remain weak throughout the second half of 2010.”
UBS, Credit Suisse Rise
UBS AG (UBSN) and Credit Suisse Group AG (CSGN), Switzerland’s biggest banks, rose 1.5 percent to 17.66 Swiss francs and 2.8 percent to 47.29 francs, respectively. Julius Baer Group Ltd. (BAER), the 120-year-old Swiss private bank, gained 3.9 percent to 37 francs.
Holcim, the world’s second-biggest cement maker, added 2.7 percent to 67.45 francs, as construction shares advanced across Europe. Wienerberger AG, the world’s biggest brickmaker, reported its first profit in six quarters.
Schindler, Swatch Climb
Schindler climbed 2.6 percent to 100 francs. The world’s second-largest maker of elevators said its second-quarter profit rose to 178 million francs ($170.6 million), beating the 161 million-franc median of three analyst estimates compiled by Bloomberg.
The company now aims for its 2010 net income to match last year’s profit. It had previously forecast “slightly” lower profit this year.
“Management is doing an excellent job and now benefits from accelerated growth in the low- and mid-rise segments combined with a continuing learning-curve effect that positively impacts margins,” Helvea SA said in a note.
Swatch Group AG (UHR) gained 2.1 percent to 343.50 francs. The maker of Omega and Breguet timepieces had its price estimate lifted to 410 francs from 360 francs at Citigroup Inc., which cited “the magnitude of Swatch’s revenue and earnings outperformance relative to industry peers in the first half.”
OC Oerlikon surged 3.4 percent to 4.30 francs. The Swiss machinery maker expects to return to profit in 2011, Chief Executive Officer Michael Buscher said in an interview.
Galenica advanced 2.1 percent to 431.75 francs. Switzerland’s largest drug wholesaler said first-half net income rose 1.3 percent to 117.4 million francs.
Forbo Holding AG (FORN) gained 1.5 percent to 528 francs. The world’s largest maker of linoleum reported overall group first-half profit of 90.9 million francs in a regulatory filing today.
“Forbo’s first-half results were outstanding and exceeded all expectations,” Vontobel AG said in a note.
Kuehne & Nagel International AG (KNIN) rose 2 percent to 108.70 francs. The world’s largest sea-freight forwarder said that Deutz AG has extended a logistics contract worth more than 100 million euros.
Swisslog fell 2.4 percent to 80 centimes as the supplier of automated storage systems said order intake and net sales in the first half of 2010 were slightly worse than last year.
Still, “the mid-term prospects remain intact and the rock solid balance sheet should provide the shares with downside protection,” Vontobel said in a note.