Swiss Stocks Close Little Changed; Swatch Shares Advance

Swiss stocks were little changed, after the Swiss Market Index yesterday dropped the most in four weeks, as Swatch (UHR) Group AG climbed, offsetting concern that the euro area has yet to contain its sovereign-debt crisis.

Nestle SA (NESN) and Roche Holding AG (ROG) dragged the most on the SMI (SMI), each slipping 0.6 percent. Swatch, the biggest maker of Swiss watches, climbed after Helvea reinstated coverage of the shares.

The SMI, a measure of Switzerland’s largest and most actively traded companies, lost 0.1 percent to 6,163.49 at the close in Zurich, paring an earlier retreat of as much as 0.7 percent. The gauge yesterday posted its biggest decline since March 6. The number of shares changing hands on the index today was 4.2 percent lower than the 30-day average, according to data compiled by Bloomberg. The broader Swiss Performance Index was also little changed.

“The phase of ‘all is well’ was at the start of the year; now we’re returning to reality,” said Yves Maillot, the head of investments at Robeco Gestions SA in Paris, who helps oversee $6.8 billion. The declines in stocks “are normal when you see the nervousness on the bond market.”

The Swiss franc strengthened through 1.20 per euro today for the first time since Sept. 6., when the Swiss National Bank imposed a limit on the currency. Within minutes of the franc breaching the ceiling, the central bank declared it would fight any further attacks.

Spanish Bond Yields

The yield difference, or spread, between Spanish 10-year bonds and similar-maturity German bunds rose to more than 400 basis points, or 4 percentage points, for the first time since Dec. 12. The spread widened 13 basis points to 403 basis points. Spain’s 10-year yield climbed seven basis points to 5.76 percent. The rate on German 10-year bunds dropped six basis points to 1.73 percent.

France sold 8.4 billion euros ($11 billion) of bonds, at the top end of its target, with borrowing costs rising for much of the debt sold. The nation auctioned 4.32 billion euros of benchmark 10-year debt at an average yield of 2.98 percent, more than the 2.91 percent paid at the last sale on March 1.

Nestle, the world’s biggest food company, lost 0.6 percent to 55.95 Swiss francs. Roche, the world’s largest maker of cancer drugs, declined 0.6 percent to 157.50 francs.

Tornos Holding AG (TOHN) slid 2.9 percent to 9.66 francs. The manufacturer of machine tools cut working hours, citing its order levels.

Swatch added 1.4 percent to 421.40 francs. Helvea reinstated the shares with an accumulate recommendation and set the price target at 480 francs.

Oridion Systems Ltd. (ORIDN) soared 70 percent to 20.45 francs, its biggest rally since its initial public offering in 2000, after Covidien Plc agreed to buy the Jerusalem-based medical-device maker for $346 million.

Newron Pharmaceuticals SpA (NWRN) jumped 18 percent to 4.28 francs. The biotechnology company entered a strategic pact with Zambon SpA for Newron’s safinamide compound.

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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