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Swiss Stocks Retreat for Third Day; Givaudan Shares Fall

Stocks in Switzerland declined for a third day as worse-than-expected investor confidence data in Germany offset a report showing new-home construction in the U.S. jumped more than forecast in March.

Givaudan SA retreated 2.2 percent as the world’s largest maker of flavorings reported first-quarter sales that missed analysts’ projections. Swatch Group AG declined in line with European luxury-goods companies. Actelion Ltd. (ATLN) advanced 3.7 percent after the drugmaker posted first-quarter earnings that beat analysts’ estimates.

The benchmark Swiss Market Index (SMI) lost 0.5 percent to 7,717.60 at the close of trading in Zurich. The measure has still rallied 13 percent this year as U.S. lawmakers agreed on a compromise budget and data fueled optimism the world’s biggest economy is recovering. The broader Swiss Performance Index also dropped 0.5 percent today.

“The expectations for the German economy got another damper after today’s survey,” Ulrich Wortberg, an analyst at Helaba Landesbank Hessen-Thueringen in Frankfurt, wrote in an e- mail. “The significant decline was to be feared after the previous month’s surprising improvement despite uncertainties regarding Italy and Cyprus.”

The volume of shares changing hands in companies on the SMI today was 15 percent greater than the average of the past 30 days, according to data compiled by Bloomberg.

German Confidence

German investor confidence declined more than economists forecast in April, suggesting the recovery in Europe’s largest economy may struggle to gain momentum.

The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, fell to 36.3 from a three-year high of 48.5 in March. Economists forecast a drop to 41, according to the median of 40 estimates in a Bloomberg News survey.

In the U.S., new-home construction jumped more than estimated as multifamily projects climbed to the highest level in more than seven years.

Starts climbed 7 percent to a 1.04 million annual rate, the most since June 2008, following a revised 968,000 annual rate in February that was larger than previously reported, Commerce Department figures showed today in Washington. The median estimate of 80 economists surveyed by Bloomberg called for 930,000.

Givaudan (GIVN) fell 2.2 percent to 1,117 Swiss francs after it reported first-quarter sales that missed analysts’ forecasts on weak demand for fine fragrances. Revenue gained 2.7 percent to 1.09 billion francs ($1.17 billion), it said today. The average estimate by analysts in a Bloomberg survey was for 1.12 billion francs. The Geneva-based company reiterated its sales growth and dividend forecasts.

Luxury Decline

Swatch, the biggest maker of Swiss watches, slid 1 percent to 525 francs. LVMH Moet Hennesy Louis Vuitton SA led a gauge of European luxury companies lower after reporting the slowest fashion and leather goods sales growth in more than three years.

Actelion rose 3.7 percent to 54.30 francs, its highest price in more than two years. The drugmaker that gets most of its sales from a treatment for a rare lung disease said operating income jumped to 124 million francs from 67.1 million francs a year earlier. Analysts had forecast operating income of 92 million francs.

“We will carefully look at guidance for the full year as it is possible that some of the forecasted profit growth for 2014 could be brought forward into this year,” Chief Financial Officer Andrew Oakley said in a statement today.

Sika AG rose 1.8 percent to 2,157 francs. The world’s largest maker of construction chemicals said it’s betting on a rebound in revenue later this year after colder-than-average weather in March in Europe and North America held back building projects. First-quarter sales fell to 1.04 billion francs from 1.06 billion francs a year earlier, the company said.

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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