Swiss stocks (SMI) declined for a fifth day, their longest losing streak in more than three months, after a report showed Chinese manufacturing may contract this month and Germany missed a government-bond sale target.
Nestle SA (NESN) led losses, dropping 1.7 percent. Cie. Financiere Richemont SA retreated 1.3 percent.
The Swiss Market Index, a measure of the largest and most actively traded companies, slid 1.1 percent to 5,386.14 at the close in Zurich. The gauge lost 5.3 percent over the last five days as Italian, Spanish and French bond yields surged, while Germany and France differed over the role of the European Central Bank in ending the region’s debt crisis. The Swiss Performance Index fell 1.2 percent today.
Germany failed to reach its sales target of 6 billion euros ($8 billion) at a bund auction. Total bids amounted to 3.889 billion euros, falling short of the maximum amount by 35 percent. The securities were sold at a yield of 1.98 percent.
“We’re witnessing political polarization spooking markets,” said Henrik Henriksen, chief investment strategist at the $45 billion Copenhagen-based PFA Pension fund. “There’s a polarization between Germany on one side, ruling out the ECB buying bonds on a larger scale, which is exactly what investors see as the way to bring back more stability to markets.”
China’s manufacturing may contract this month by the most since March 2009, adding to evidence the world’s second-biggest economy is slowing, a preliminary purchasing managers’ index showed today. The reading of 48 reported by HSBC Holdings Plc and Markit Economics for November compares with a final number of 51 for October. A number below 50 indicates contraction.
Euro-area services and manufacturing output contracted for a third month in November as the worsening debt crisis pushed the region closer to a recession. A euro-region composite index based on a survey of purchasing managers in both industries rose to 47.2 from 46.5 in October, London-based Markit said in an initial estimate today. Economists in a Bloomberg News survey forecast a drop to 46.1 on average.
Nestle, which makes up more than a quarter of the SMI index, declined 1.7 percent to 50.60 Swiss francs.
Richemont, the maker of Cartier watches and Montblanc pens that earns two thirds of its revenue in the U.S. and Asia (CFR), slipped 1.3 percent to 43.80 francs.
Gategroup Holding AG (GATE) fell 18 percent to 21.15 francs after the Swiss airline catering company lowered its 2011 profit target on a slowdown in Europe and North America. The company also said that profitability won’t improve in 2012.
Julius Baer Group Ltd. (BAER) declined 1.7 percent to 30.99 francs. Switzerland’s largest publicly traded private bank is still considering plans to acquire a stake in Bank Sarasin & Cie. AG, Remy Bersier, a member of Baer’s executive board, told reporters in Dubai today. Bank Sarasin slipped 5 percent to 32.15 francs.
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