Swiss Stocks Advance as U.S. Adds More Jobs Than Forecast; Novartis Climbs

Swiss stocks advanced for a third day as a report showed U.S. payrolls climbed more than forecast and Greece reached its target for bondholder participation in the biggest sovereign restructuring in history.

Novartis (NOVN) AG, Europe’s biggest drugmaker by sales, led pharmaceutical companies higher after being added to UBS AG’s list of recommended shares. Adecco SA (ADEN), the world’s largest provider of temporary employees, increased 2.3 percent.

The Swiss Market Index (SMI), a measure of Switzerland’s biggest and most actively traded companies, rose 0.6 percent to 6,188.51 at the close in Zurich. The gauge posted a 0.6 percent gain this week, its first weekly advance in three.

The SMI has climbed 4.3 percent this year after the European Central Bank lent regional financial institutions more than 1 trillion euros ($1.3 trillion) for three years and U.S. economic reports topped estimates. The broader Swiss Performance Index also added 0.6 percent today.

“The worst case scenario of a disorderly default has been cast aside, and this is a relief for the market,” said Benoit Peloille, equity-market strategist at Natixis in Paris. “But the long-term solvency question remains. The question of Greece’s future may come up again and other aid packages can’t be ruled out.”

Greece said bondholders owning 85.8 percent of Greek-law bonds agreed to the debt swap, enabling it to proceed with the transaction. The government will trigger an option forcing more investors to join, increasing the participation to 95.7 percent.

Greece’s Debt Swap

The Mediterranean nation’s government offered to exchange the holdings for new securities. Twenty billion euros of foreign-law bonds were also tendered, the Greek Finance Ministry said. The swap will help reduce Greece’s debt to 120.5 percent of gross domestic product by 2020, according to the euro-area politicians who drafted Greece’s second bailout deal.

Swiss stocks have gained 44 percent since March 9, 2009, when a bull-market rally began in U.S. stocks after the financial meltdown of 2008. The Stoxx Europe 600 Index (SXXP) has surged 68 percent and the Standard & Poor’s 500 Index (SPX) has more than doubled over the same period.

In the U.S., a Labor Department report today showed that employers added more jobs to payrolls in February than forecast. The 227,000 increase in payrolls followed a revised 284,000 gain in January. Job growth over the last six months was the strongest since 2006. The median projection of economists in a Bloomberg News survey called for a 210,000 increase in employment in February.

Pharmaceutical Shares

Novartis added 1.8 percent to 50 Swiss francs, a second day of gains. Karen Olney, head of thematic equity strategy at UBS, upgraded European pharmaceutical shares to overweight, meaning investors should hold a higher proportion of the shares than benchmark indexes.

Nobel Biocare (NOBN) Holding AG jumped 8.1 percent to 11.40 francs, the largest increase since November. The second-biggest maker of dental implants was upgraded to conviction buy at Goldman Sachs Group Inc.

Straumann Holding AG (STMN), another dental implant maker, surged 8.7 percent to 153.80 francs, the most since 2008, as Goldman Sachs raised the stock to buy from sell.

The market for dental implants will probably grow faster than previously estimated, and the two stocks remain “relatively inexpensive,” Veronika Dubajova, an analyst at Goldman Sachs in New York, wrote.

Adecco advanced 2.3 percent to 47.94 francs. Euro-area and U.K. staffing companies have outperformed the market, a signal that investors predict economic conditions in the region will be better than economists have forecast.

“The environment is not as bad as they thought before,” said Vincent Treulet, head of strategy at BNP Paribas Investment Partners in Paris.

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net

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

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