Swiss stocks rallied for a third day, sending the Swiss Market Index (SMI) to the highest in two months, as investors speculated that the Federal Reserve will maintain stimulus measures to drive global economic growth.
Credit Suisse Group AG (CSGN) led financial shares higher after Deutsche Bank AG upgraded Switzerland second-biggest bank. Swiss Reinsurance Co. and Zurich Financial Services AG both gained more than 1 percent. Bank Sarasin & Cie. AG rallied 3.8 percent amid a report the managers of the bank are seeking to buy out its majority shareholder.
The SMI, made up of the biggest and most actively traded companies, rose 0.6 percent to 6,597.79 at 11:21 a.m. in Zurich, extending this week’s advance to 0.5 percent. The broader Swiss Performance Index rose 0.6 percent today.
Stocks rallied yesterday after minutes from the Fed’s April policy meeting on May 18 said talks about an exit strategy from record stimulus measures did not mean monetary tightening “would necessarily begin soon.”
Fed Bank of Chicago President Charles Evans reiterated after the close of European trade yesterday that improvements in the economy, labor market and the outlook for inflation were not sufficient to begin withdrawing monetary stimulus.
Credit Suisse climbed 1.7 percent to 36.99 francs after Deutsche Bank raised its recommendation for the bank to “buy” from “hold.” Analysts said the stock’s underperformance this year was “unjustified” give the bank is not exposed to peripheral Europe and it reported good first-quarter results.
UBS, Swiss Re
UBS climbed 1.4 percent to 16.56 francs. Switzerland’s biggest bank yesterday denied speculation that Wells Fargo & Co. may buy its U.S. wealth management unit, saying it remains an “important part” of the lender.
Swiss Re, the world’s second-biggest reinsurer, climbed 1.7 percent to 52 francs while Zurich Financial, Switzerland’s biggest insurer, gained 1.4 percent to 231.9 pence.
Sarasin rallied 3.8 percent to 40.6 francs after the Financial Times reported that managers of the Swiss private bank are seeking to buy out Rabobank Nederland for 3 billion Swiss Francs ($3.4 billion), citing an interview with Chief Executive Officer Joachim Straehle.
“I make no secret of the fact that we would love do an MBO,” Straehle said, according to the FT. While no formal negotiations have been held, informal talks have taken place, the FT said, citing Straehle.
Komax Holding AG (KOMN) rallied 4.1 percent to 114.5 francs after Credit Suisse raised its recommendation to “outperform” from “neutral.”
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