Benchmark Swiss Stocks Advance on Better-Than-Forecast U.S. Data, Watches

Swiss stocks (SMI) climbed for a second day following a report that showed better-than-estimated housing starts in the world’s largest economy and as watchmakers advanced.

Swatch Group AG (UHR) and Cie. Financiere Richemont SA rose at least 2.9 percent after Swiss watch exports increased. Novartis AG, Europe’s biggest drugmaker by sales (NOVN), slid 0.4 percent after deciding to stop a clinical test of its heart drug Tekturna.

The Swiss Market Index, a measure of Switzerland’s biggest and most actively traded companies, gained 0.6 percent to 5,804.31 at the close in Zurich. The benchmark has declined 10 percent this year as the euro area sovereign-debt crisis spread. The broader Swiss Performance Index rose 0.8 percent today.

“The combination of bargain hunters and a quiet market could well offer a degree of support in the days ahead,” said Terry Pratt, an institutional trader at IG Markets.

European Central Bank President Mario Draghi said that substantial risks to the economy remain. The 17-member euro area and four European Union countries that don’t use the single currency agreed to channel 150 billion euros ($195 billion) to the International Monetary Fund following a meeting of finance ministers yesterday.

Swiss Exports

Swiss exports declined the most in three months in November. Foreign sales, adjusted for inflation and seasonal swings, fell 6.8 percent from October, the Federal Customs Office in Bern said today. Imports dropped 7.7 percent after rising 1.4 percent in the previous month and the country’s trade surplus widened to 3 billion Swiss francs ($3.2 billion) from 2.16 billion francs in October.

In the U.S., a Commerce Department report today showed that builders began work on the most houses in over a year in November. Starts increased 9.3 percent to a 685,000 annual rate, topping the highest estimate of economists surveyed by Bloomberg News. Building permits, a proxy for future construction, also climbed to a more than one-year high.

Swatch, the world’s largest watchmaker, gained 2.9 percent to 338 francs as a report showed that Swiss watch exports rose 16 percent in November from a year earlier. Richemont, the owner of the Cartier brand, increased 3 percent to 46.33 francs.

Clariant AG rallied 5.2 percent to 9.21 francs and Syngenta AG rose 2.5 percent to 267.10 francs as a gauge of chemical companies was the second-best performer in the Stoxx 600, gaining 3.4 percent.

Implenia, Roche

Implenia AG (IMPN), Switzerland’s biggest builder, gained 2.3 percent to 22.50 francs, its highest price this month, after the company said 2011 profit will exceed 2010 net income because of improved business in tunneling and real-estate project development.

Serge Rotzer, an analyst at Vontobel Holding AG, upgraded the stock to “buy” from “hold.”

Novartis lost 0.4 percent to 52.60 francs after saying it decided to stop a clinical test of the heart drug Tekturna in a group of high-risk patients for safety reasons, a setback that may hurt sales of the medicine.

Roche Holding AG (ROG), the world’s largest maker of cancer drugs, fell 0.4 percent to 157.70 francs and Sonova Holding AG (SOON), the hearing-aid maker, dropped 0.8 percent to 90.20 francs.

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

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

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