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Swiss Stocks Drop as Greek Debt Talks Continue; Baer, Banks Fall

Swiss stocks fell for the second time in three days as Greece’s talks with private bondholders for a debt-swap agreement continued.

Julius Baer Group Ltd. (BAER), the Swiss wealth manager founded in 1890, slid 4.1 percent after saying full-year profit declined 27 percent. Straumann Holding AG (STMN) and Nobel Biocare AG lost at least 1.4 percent after Jefferies Group Inc. downgraded the stocks. ABB Ltd. (ABBN), the world’s biggest maker of power-transmission gear, dropped 1.3 percent.

The Swiss Market Index (SMI), a measure of Switzerland’s biggest and most actively traded companies, declined 0.3 percent to 6,135.23 at 2:51 p.m. in Zurich. The benchmark gauge advanced 2 percent last week as investors speculated that the euro area will contain its sovereign-debt crisis and as the U.S. jobless rate fell to the lowest in three years. The SMI has climbed 3.4 percent this year. The broader Swiss Performance Index also retreated 0.3 percent today.

“The market is extremely nervous before the Greek government gives an answer on the haircut that will be applied to their debt for international private creditors,” said John Plassard, director at Louis Capital Markets SA in Geneva. “It can be expected that the Greek government won’t keep their promise about the public spending cuts, so the level of the haircut will be closely watched.”

European leaders maintained pressure on Greece to accept terms demanded by international lenders during a weekend of talks to avert a financial collapse.

Greek Austerity

Greek Prime Minister Lucas Papademos struck a tentative deal with political parties on austerity measures demanded by international creditors. Politicians agreed in a five-hour meeting yesterday to make additional reductions this year equal to 1.5 percent of gross domestic product.

China’s economic expansion would be cut almost in half if Europe’s debt crisis worsens, the International Monetary Fund said. Based on the IMF’s “downside” forecast for the global economy, China’s growth could drop by as much as 4 percentage points from the fund’s current projection, which is for 8.2 percent this year, the organization said in a report released today by its China office in Beijing.

Julius Baer retreated 4.1 percent to 36.30 Swiss francs after it said full-year net income declined 27 percent to 258 million francs ($280 million). Baer also said it will probably have to pay a fine to resolve tax matters with U.S. authorities.

UBS, Credit Suisse

UBS AG (UBSN) and Credit Suisse Group AG (CSGN), Switzerland’s largest lenders, fell 1 percent to 13.31 francs and 1.9 percent to 25.23 francs, respectively. A gauge of banking shares was among the worst performers of the 19 industry groups in the Stoxx Europe 600 Index.

Straumann, the world’s biggest maker of dental implants, slipped 1.4 percent to 172.40 francs and Nobel Biocare lost 4 percent to 13 francs. Both stocks were downgraded to “hold” from “buy” at Jefferies.

ABB, the world’s biggest maker of power-transmission gear, lost 1.3 percent to 19.85 francs as UBS lowered its recommendation for the stock to “neutral” from “buy.”

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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