Swiss Stocks Slide, Ending Two-Day Increase; Zurich Financial Shares Fall
Swiss stocks retreated, ending a two- day gain, as a government report showed U.S. employers added fewer jobs than forecast in November and the unemployment rate unexpectedly increased.
Zurich Financial Services AG lost 1.7 percent after posting a 6.1 percent gain in two days. Shares of drugmaker Novartis AG declined 1.7 percent. Adecco SA rose after setting up a joint venture in China.
The Swiss Market Index declined 0.7 percent to 6,440.9 at the 5:30 p.m. close of trading in Zurich. The gauge, which has lost 0.7 percent this week, has still rallied 8.4 percent from its 2010 low in July. The broader Swiss Performance Index slid 0.5 percent today.
“The U.S. labor report is really disappointing,” said James Knightley, an economist at ING Financial Markets in London. “It is the most watched U.S. data release and will not be good for risk sentiment as we head into next week during which the outcome of the vote on the Irish budget on Tuesday has the potential to lead to renewed concern about euro-zone sovereign debt.”
U.S. payrolls increased 39,000 last month, less than the most pessimistic prediction of economists surveyed by Bloomberg News, after a revised 172,000 increase in October, Labor Department figures showed. The jobless rate rose to 9.8 percent, the highest since April.
Zurich, Switzerland’s largest insurer, retreated 1.7 percent to 233.1 Swiss francs.
“The operational programs that Zurich Financial has in place should support an at least maintained level of profitability,” Helvea SA said in a report. “However, we question whether this is enough to make an investment case.”
Novartis retreated 1.7 percent to 53.45 francs. CA Cheuvreux reiterated an “underperform” recommendation on the Swiss drugmaker after Momenta Pharmaceuticals Inc., which receives royalties from the only approved generic version of the blood thinner Lovenox, filed a patent-infringement suit to block a potential rival drug from Teva Pharmaceutical Industries Ltd.
Momenta and its partner, Novartis’s Sandoz, began selling copies of the Sanofi-Aventis SA drug after receiving U.S. Food and Drug Administration approval July 23. Roche Holding AG, the world’s biggest maker of cancer medicines, slid 0.7 percent to 138.4 francs.
UBS AG, the country’s biggest bank, fell 0.5 percent to 15.71 francs. The Swiss government said that a double-taxation agreement with Germany and five other nations will be passed to parliament for approval.
Adecco rose 0.6 percent to 59.95 francs. The world’s largest supplier of temporary workers started a joint venture in Shanghai with Chinese human-resources service company Fesco. Adecco will hold 49 percent of the equity.
The news is “positive as it offers an entrance in a potentially important market,” CA Cheuvreux said in a note.
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