Swiss Stocks Advance; Holcim, Lonza, Nestle Lead Increase in Benchmark SMI

Swiss stocks gained after increased demand for government bonds from Portugal to Poland helped ease investors’ concern that the region’s sovereign debt crisis will curb economic growth.

Nestle SA, the world’s largest food company, rose after Natixis Securities advised buying the company’s shares. Holcim Ltd., the world’s second-biggest cement maker, climbed 1.5 percent, leading rising shares on the Swiss Market Index.

The benchmark SMI advanced 0.4 percent to 6,386.95 at the 5:30 p.m. close in Zurich. The benchmark has climbed 7.5 from its low for the year in July. The broader Swiss Performance Index rose 0.4 percent today.

“When we talk to companies, they are worried about the double-dip recession possibility, but we and they don’t anticipate one,” Alister Hibbert, who manages about $497 million in European stocks for BlackRock Inc. in London, said at a press briefing today. “In the short term, the earnings picture remains very, very supportive.”

Portugal’s sale of bonds due 2021 attracted bids for 2.6 times the amount offered today, compared with a bid-to-cover ratio of 1.6 in the earlier March sale. An auction of five-year debt by Poland attracted the biggest demand since 2008, while Czech borrowing costs fell to a record low at a sale of three- year bonds.

Nestle gained 0.5 percent to 54.05 Swiss francs. Investors should hold more food company shares than are represented in benchmarks, Natixis analyst Sylvain Goyon wrote in a report today, as he raised his stance on the industry to “outperform” from “market perform.”

Holcim advanced 1.5 percent to 64.5 francs.

Lonza Group AG rallied 1.9 percent to 88.60 francs. Lonza said it had agreed to supply manufacturing capacity to GlaxoSmithKline Plc for five early stage monoclonal antibodies.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net.

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