Swiss stocks declined as yields on Italian and Portuguese bonds climbed amid speculation that some of Europe’s most indebted countries won’t be able to repay debt.
The Swiss Market Index (SMI) of the biggest and most actively traded companies slipped 0.2 percent to 6,498.66 at 10:21 a.m. in Zurich, meaning the gauge has risen less than 1 percent this year. The broader Swiss Performance Index also fell 0.2 percent today.
The yield on Italian 10-year government bonds rose to 5 percent for the first time since Nov. 2008. The Portuguese 10- year note yield increased to its highest since the euro was introduced in 1999.
Moritz Kraemer, managing director of European sovereign ratings at S&P, warned some countries may have their credit ratings cut further while a Greek debt default is a “possibility.”
Asked if the worst was over for the region’s sovereign credit-rating outlook, Kraemer said: “I wish I could say yes, but the answer is no.” Kraemer was speaking in an interview at a EuroMoney conference in London yesterday.
Crude dropped as much as 0.8 percent to $104.21 a barrel in New York as speculation mounted that OPEC will consider boosting output to compensate for disruptions in Libya and U.S. crude inventories climbed.
Credit Suisse lost 0.9 percent to 40.10 Swiss francs, the lowest in nearly two months.
Charles Voegele rallied 1.7 percent to 62.75 francs, its sixth gain. The shares have surged 14 percent this month. Credit Suisse raised its rating on the retailer to “outperform” from “neutral” after the company published earnings yesterday including a profit that trebled analysts’ estimates.
“The company’s restructuring measures have started to show their first positive effects,” Patrick Jnglin, analyst at the bank, wrote in a note to clients today. Vontobel AG, the Zurich- based brokerage, also recommended the shares.
Schulthess Group (SGRN) AG slid 2.9 percent to 48.50 francs, trimming yesterday’s 7.7 percent gain.
To contact the reporter on this story: Giles Broom in Zurich at firstname.lastname@example.org.