Swatch Group AG, the world’s largest watch maker, and Cie. Financiere Richemont, owner of the Cartier brand, climbed more than 2 percent. Holcim, the second-biggest cement maker, fell 1.7 percent. Givaudan SA, the largest maker of flavors and fragrances, dropped 1.7 percent. Swissmetal Holding AG tumbled to the lowest price in more than 20 years after being forced to shut a plant that it had used as bank collateral.
The Swiss Market Index (SMI), a measure of the largest and most actively traded companies, slipped less than 0.1 percent to 6,243.01 at the 5:30 p.m. close in Zurich. The broader Swiss Performance Index declined 0.1 percent.
“Equity markets will continue to trend sideways through the summer months before heading higher in the fourth quarter,” Christoph Riniker, head of strategy research at Julius Baer Group Ltd., wrote in a report. “Investors appear to be uneasy given that economic leading indicators are faltering, albeit at high levels. On the other hand, other asset classes than equities are not compelling.”
The SMI rallied 4 percent last week, its biggest gain in three months, after Greek lawmakers passed a five-year austerity package, qualifying the country for further aid. The gauge has still tumbled 7.1 percent since its high this year on Feb. 18 as U.S. manufacturing and jobs reports fueled concern that the recovery is faltering and investors speculated that Greece will default on its debt.
U.S. Factory Orders
A U.S. report today showed factory orders increased in May, indicating manufacturing may rebound from a slowdown in economic growth in the first half of 2011. Bookings for manufacturers’ goods rose 0.8 percent, less than economists had forecast. The Commerce Department revised the April reading of the measure to a decline of 0.9 percent, smaller than previously estimated.
Swatch Group rose 2 percent to 439.80 Swiss francs, its highest price since at least 1993. Richemont gained 2.1 percent to 56.80 francs as Hong Kong jewelry, watches and clock sales increased 61 percent year-on-year in May. They gained 55 percent in April.
Holcim retreated 1.7 percent to 62.65 francs as a gauge of European construction companies was the worst performer of the 19 industry groups in the Stoxx Europe 600 Index, sliding 1.1 percent.
Givaudan (GIVN) dropped 1.4 percent to 888 francs as HSBC Holdings Plc cut its price estimate to 1,020 francs from 1,070 francs on lower estimates.
Swissmetal tumbled 12 percent to 4.50 francs, its lowest price since at least 1989, after shutting a plant in Dornach, Switzerland that it had used as bank collateral. Swissmetal’s board and management plan to find a “stabilization of liquidity” and will hold talks with the unidentified bank tomorrow, according to a statement.
Nestle SA (NESN) gained 0.7 percent to 53.05 francs after the maker of KitKat chocolate bars and Nescafe Gold Blend instant coffee said it plans to spend 1.2 billion francs ($1.4 billion) by 2015 to expand production capacity in Africa, where sales growth has outpaced that of Europe and North America.
Standard & Poor’s and Fitch Ratings may enable European Central Bank President Jean-Claude Trichet to support a private investor rollover of Greek debt by saying a default rating would be partial and temporary.
Trichet put Greece’s fate in the hands of ratings companies when officials began saying in May that the ECB, which has lent 98 billion euros ($142 billion) to Greek banks, would refuse to accept the nation’s bonds as collateral if any “burden sharing” by private investors produced a default rating.
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