Swiss Stocks Advance for Third Day in Four; Banks Rally

Stocks in Switzerland advanced, rebounding from yesterday’s biggest drop in a month for the benchmark Swiss Market Index, as a rally by bank stocks outweighed declines by watchmakers.

UBS AG (UBSN) and Credit Suisse Group AG (CSGN) climbed more than 1.5 percent, following a gauge of European lenders higher. Swatch Group AG (UHR) and Cie. Financiere Richemont SA dropped more than 1 percent as growth in Swiss watch exports slowed.

The SMI gained 0.6 percent to 5,852.44 at the close in Zurich. The gauge has retreated 7.7 percent from this year’s high on March 16 amid concern Greece may fail to implement austerity measures and leave the euro currency union. The Swiss Performance Index also rose 0.6 percent today.

“European markets are rebounding, supported by a short squeeze, especially on banking shares,” said John Plassard, director at Louis Capital Markets SA in Geneva. “This technical rebound we’re seeing right now may be short-lived, however.”

The volume of shares changing hands in SMI-listed companies was 9.6 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.

European Union leaders met in Brussels yesterday and gave EU President Herman Van Rompuy the job of sketching out “building blocks” for a more integrated euro area by the next summit on June 28-29 -- after a Greek election on June 17 that may trigger the country’s withdrawal from the currency.

Euro Bonds

The leaders clashed over joint debt sales as they called on Greece to stick with the budget cuts needed to stay in the euro.

“We had a not unheated discussion on euro bonds,” Luxembourg Prime Minister Jean-Claude Juncker, who heads the group of euro-area finance ministers, said after talks in Brussels.

Swiss exports fell in April, adding to signs the franc’s strength has curbed foreign sales. Exports adjusted for inflation and working days decreased 0.9 percent from March, when they dropped a revised 2.4 percent, the Federal Customs Office in Bern said today. Imports gained 2.6 percent and the trade surplus narrowed to 1.33 billion Swiss francs ($1.39 billion).

In the U.S., a Commerce Department report showed that orders for computers, machinery and other capital equipment dropped in April for a second month, pointing to a slowdown in U.S. business investment.

U.S. Durable Goods

Bookings for non-military goods excluding aircraft decreased 1.9 percent after falling 2.2 percent in March, the first back-to-back decline in a year. Demand for all durable goods -- items meant to last at least three years -- rose 0.2 percent, matching the median forecast of economists surveyed by Bloomberg News.

Elsewhere, a private survey showed that China’s manufacturing may shrink for a seventh month in May. The 48.7 preliminary reading for a purchasing managers’ index released by HSBC Holdings Plc and Markit Economics today compared with a final 49.3 for April.

UBS, Switzerland’s largest lender, gained 2.2 percent to 11.25 Swiss francs, while Credit Suisse, the second biggest, added 1.8 percent to 19.36 francs. Julius Baer Group Ltd. (BAER) added 1.9 percent to 31.08 francs.

Sonova Holding AG (SOON) advanced 3.3 percent to 86.80 francs after HSBC raised the hearing-aid maker to overweight, the equivalent of buy, from neutral.

Swatch, the world’s largest watchmaker, dropped 1.3 percent to 370.70 francs, its lowest price since Jan. 11. Richemont, the owner of the Cartier brand, declined 1.5 percent to 55.40 francs. A report showed that Swiss watch exports rose 7.9 percent in April from the same month last year, their slowest pace in more than two years.

Ypsomed Holding AG (YPSN) fell 4.5 percent to 54.40 francs, the most since September 2010. The company that supplies needles and injection pens to Sanofi reported full-year sales of 248.6 million francs compared with 261.8 million francs from a year earlier.

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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