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Swiss Stocks Increase; Richemont, Swatch, Basilea Climb as Swisscom Slides

Swiss stocks climbed for a second day as claims for U.S. jobless benefits declined more than forecast last week.

UBS AG and Credit Suisse Group AG increased 1.5 percent and 2.2 percent, respectively. Cie. Financiere Richemont SA rose 1.5 percent after JPMorgan Chase & Co. and UBS lifted their price estimates. Barry Callebaut AG jumped 6 percent after it agreed to supply Kraft Foods Inc. with chocolate. Swisscom AG fell 1.5 percent after it announced that it will cut its mobile- termination charges.

The Swiss Market Index increased 38.31, or 0.6 percent, to 6,425.26 at the 5:30 p.m. close in Zurich. The measure has gained 8.1 percent from its low for the year in July. The broader Swiss Performance Index also added 0.6 percent to 5,662.87 today.

Initial jobless claims in the U.S. dropped by 27,000 to 451,000 in the week ended Sept. 4, Labor Department figures showed today in Washington. The total number of people receiving unemployment insurance was little changed, while those getting extended payments rose.

The U.S. Federal Reserve said after the close of European markets yesterday that the world’s largest economy continued to grow even as it showed “widespread signs of a deceleration” in mid-July through the end of August, according to a survey of 12 regional Fed banks. Five regional banks reported “economic growth at a moderate pace” and two pointed to “positive developments or net improvements.” The remaining five banks said conditions were mixed or decelerating.

“Yes, the U.S. economy is slowing,” Ian Harwood, chief economist at Evolution Securities Ltd., wrote in an e-mailed comment. “But it’s doing so from the reasonably brisk pace that it previously obtained. Nothing at present indicates that anything worse than a classic mid-cycle slowdown is underway.”

UBS, Credit Suisse Climb

UBS and Credit Suisse, Switzerland’s biggest banks, rose 1.5 percent to 18.16 Swiss francs and 2.2 percent to 46.28 francs, respectively. Julius Baer Group Ltd., the 120-year-old Swiss private bank, gained 1.8 percent to 38.59 francs.

Richemont rose 1.5 percent to 42.69 francs. JPMorgan and UBS increased their price estimates on the world’s largest jewelry maker to 54 francs from 51 francs and to 44 francs from 42 francs, respectively.

Swatch Group AG, the maker of Omega and Breguet watches, increased 1.7 percent to 344.80 francs.

Barry Callebaut, Basilea Rise

Barry Callebaut surged 6 percent to 746 francs. The company said it will supply cocoa and industrial chocolate to Kraft under a long-term worldwide master product deal.

Basilea Pharmaceutica Ltd. increased 1.6 percent to 65 francs. The biotechnology company’s partner Johnson & Johnson will stop selling the smaller company’s ceftobiprole skin and soft-tissue infection drug in Switzerland, Russia and Ukraine.

Helvea SA reiterated a “buy” recommendation on Basilea, highlighting that “this and the coming withdrawals have no material impact on Basilea’s revenue since the drug has not been actively marketed in these countries anyhow.”

ABB Ltd. rose 1.6 percent to 20.83 francs. reinstated coverage of the world’s largest builder of electricity networks with a “neutral” rating and a price estimate of 21 francs.

Temenos Group AG surged 2.8 percent to 27.75 francs. The software company was rated new “buy” at UniCredit Global Research, which said in a note that “Temenos offers software for the banking sector, which is still a relatively underpenetrated vertical for standard software.”

Transocean Gains

Transocean Ltd., the owner of the rig that exploded while drilling BP Plc’s Macondo oil well in the Gulf of Mexico, increased 3.1 percent to 56.45 francs.

“BP’s report accuses the other two main parties, Transocean and Halliburton, of shared responsibility,” Vontobel AG said in a note. The brokerage kept a “hold” rating on Transocean with a price estimate of 65 francs as “to get a more objective and clearer picture of the failures of the accident, we need the results from the analysis of the blow-out preventer, reports from Halliburton Co. and Transocean as well as the results from U.S. government investigations.”

Swisscom retreated 1.5 percent to 392 francs. The company said it will reduce its mobile-termination charges from 14 cents per minute to 8 cents per minute on Oct. 1. The charges will decline to 7 cents per minute next year, bringing them down to the European average, the company said.

Nestle AG dropped 0.4 percent to 53.85 francs. UBS removed the world’s largest food company from its “European Key Calls List,” citing the stock’s recent performance. The brokerage kept a “buy” rating, while trimming its price estimate to 58.50 francs from 59 francs.

To contact the reporter on this story: Francesca Cinelli in Milan at fcinelli@bloomberg.net.

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