Stocks in Switzerland Decline; Swiss Re, UBS, Zehnder Retreat

Swiss stocks dropped as Greece and Portugal’s credit ratings were cut by Standard & Poor’s and consumer demand in Switzerland fell for a second month.

Swiss Reinsurance Co. fell after saying the cost of natural disasters rose 76 percent last year. UBS AG (UBSN) slid 1.9 percent.

The Swiss Market Index (SMI) of the biggest and most actively traded companies lost 0.1 percent to 6,355.06 at the 5:30 p.m. close in Zurich. The measure has still rebounded 5.5 percent since March 16 as investors speculated that Japan would contain its nuclear crisis and as the U.S., the U.K. and France took control of Libya’s airspace. The broader Swiss Performance Index advanced 0.1 percent to 5,788.64.

“Investors are cautious on the situation in Japan and await the consequences, which are still hard to predict,” said Lars Knudsen, portfolio manager at LGT Capital Management AG in Pfaeffikon, Switzerland, who helps manage 86 billion Swiss francs ($93 billion) of client assets. “Better U.S. economic data and a good start to the reporting season could help equity markets.”

Japanese Prime Minister Naoto Kan today said for the first time that a damaged nuclear plant’s tsunami defenses were inadequate, while reassuring the public that radiation leaks pose no health threat beyond an evacuation zone.

Water in a tunnel outside the Dai-Ichi No. 2 reactor emitted radiation exceeding 1 sievert an hour, a Tokyo Electric Power Co. spokesman said yesterday. Exposure to that dose for 30 minutes would trigger nausea while for four hours might lead to death within two months, according to the U.S. Environmental Protection Agency.

Portugal, Greece

Stocks fell today after Standard & Poor’s lowered its debt rating for Greece and Portugal. The agency now rates Portugal BBB-/A-3. BBB- is the lowest investment grade.

A gauge of Swiss consumer demand fell for a second month in February as surging energy costs left households with less money to spend. The consumption indicator slipped to 1.46 from 1.66 in January, Zurich-based UBS said in a statement today.

In the U.S. confidence among consumers dropped more than forecast in March as fuel costs surged to the highest level in more than two years. The Conference Board’s confidence index fell to a three-month low of 63.4 from a revised 72 reading in February, figures from the New York-based private research group showed today.

Swiss Re, the world’s second-largest reinsurer, fell 0.9 percent to 51.05 francs, trimming yesterday’s 1.9 percent gain.

Natural Disasters

The cost to insurers of natural disasters rose 76 percent to $40 billion last year because of higher losses from earthquakes including those that struck Chile and New Zealand, the company said.

UBS dropped 1.9 percent to 16.72 francs, its first decline in four days.

Zehnder Group AG (ZEH) lost 2.3 percent to 2,570 francs, even after reporting a 14 percent increase in net income and 9 percent sales growth for 2010. The maker of bathroom radiators proposed a 50-franc par-value payment and a 25-franc dividend per share.

The earnings and profit figures “were slightly below estimates,” Patrick Appenzeller, an analyst at Helvea AG, wrote in a note to clients. Zehnder has rallied 13 percent in the past eight trading days.

Credit Suisse, the nation’s second-biggest bank, climbed 0.8 percent to 39.47 francs after earlier rising as much as 1.8 percent. The bank seems to have structures in place “that prevented systemic fraud” in the U.S., Neue Zuercher Zeitung reported, citing an interview with Donald Beyer, the U.S. ambassador to Switzerland.

Beyer said he expects lawsuits by American authorities will be limited “to a few people” and that he has no indication the bank committed systemic fraud, the newspaper reported. The Credit Suisse case differs from UBS regarding those structures, the newspaper said, citing Beyer.

Nobel Biocare Holding AG (NOBN), the world’s largest maker of dental implants, rose 4.8 percent to 19.08 francs, the biggest gain in the Stoxx 600 Europe Healthcare Index.

To contact the reporter on this story: Giles Broom in Zurich at gbroom@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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