Breaking News

Tweet TWEET

Swiss Stocks Retreat; Credit Suisse, Syngenta, SGS Shares Drop

Swiss stocks fell, led by banks and chemical makers, amid concerns Greece may default on its debt.

Credit Suisse Group AG (CSGN), Switzerland’s second-biggest bank, dropped for a third straight day. Syngenta AG (SYNN), the maker of crop protection chemicals, fell 2 percent. SGS SA (SGSN) slipped after the world’s largest goods-inspection company said it acquired Correl Rail Ltd.

The Swiss Market Index (SMI) of the biggest and most actively traded companies lost 0.5 percent to 6,125.82 at 12:05 p.m. in Zurich as speculation grew that Greece may default. The gauge has declined 4.8 percent this year. The broader Swiss Performance Index slipped 0.6 percent.

“Even though I do not expect a default of Greece in the short term, it seems to be a realistic scenario in the mid term,” said Kai Fachinger, who manages about $854 million in equities for SAM Sustainable Asset Management AG in Zurich. “I expect the macroeconomic situation to remain bumpy.”

Alan Greenspan, former Federal Reserve chairman, said a default by Greece is “almost certain” and could help drive the U.S. economy into recession.

“The problem you have is that it’s extremely unlikely the political system will work” in a way that solves Greece’s crisis, Greenspan, 85, said in an interview yesterday with Charlie Rose in New York. “The chances of Greece not defaulting are very small.”

A “hard haircut” for investors in Greek securities would risk contagion to other European countries and have unpredictable knock-on effects, Jean-Claude Juncker, head of the euro-area finance ministers group, was cited as saying in an interview with the newspaper Tagesspiegel.

Leading Indicators

The index of U.S. leading indicators probably rebounded in May after declining for the first time in almost a year in April, a sign that economic growth may pick up by the end of 2011, economists forecast a report will show today. Another report may show that U.S. consumer confidence was little changed this month.

Credit Suisse declined 1.2 percent to 33.55 Swiss francs. The Basel Committee on Banking Supervision is considering extra capital requirements of as much as 3.5 percentage points that the largest banks may face if they grow bigger, according to two people familiar with the talks.

The so-called surcharge would take the form of a boost to capital the banks must hold and would apply to financial institutions whose collapse would harm the global economy. A list of such banks hasn’t been disclosed.

Syngenta lost 2 percent to 273.30 francs as a gauge of European chemicals companies was amongst the biggest fallers in the Stoxx Europe 600 Index.

SGS dropped 1.3 percent to 1,578 francs after saying it acquired Correl Rail Ltd., a U.K. certification company with 2.1 million pounds ($3.4 million) revenue.

Transocean Ltd. (RIG), the company claiming the deepest offshore oil drilling record, fell 1.7 percent to 52.05 francs. Weatherford International Ltd. (WFT), another Geneva-based oil rig owner, slid 1.5 percent to 14.54 francs.

Acino Holding AG (ACIN), the Swiss maker of generic drugs, added 2.4 percent to 85.50 francs. Acino and Bayer HealthCare Pharmaceuticals have signed a multiyear manufacturing contract for Bayer’s contraceptive patch, the company said today. The total investment for a new Acino factory amounts to about 20 million euros ($28.4 million), it said.

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.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.