Swiss Stocks Gain Most in Four Weeks as Novartis Climbs
Swiss stocks climbed the most in four weeks as markets reopened after a public holiday during which European Central Bank President Mario Draghi reiterated interest rates will remain low for an extended period.
UBS AG (UBSN) and Credit Suisse Group AG (CSGN), Switzerland’s two biggest lenders, each rose more than 2 percent. Nestle SA, the world’s largest food company, added 2.9 percent to its highest price in two months. Novartis (NOVN) AG climbed 1.4 percent after the U.S. Food and Drug Administration said that children as young as two months old can use the company’s Menveo drug as a vaccine against one of the main causes of bacterial meningitis.
The Swiss Market Index (SMI) advanced 1.8 percent to 7,963.93 at the close of trading in Zurich, extending its gain this week to 2.1 percent. The Swiss market was closed yesterday for a holiday. The gauge climbed 1.8 percent in July as the Federal Reserve said it remains flexible on the future of its bond-buying program. The broader Swiss Performance Index also added 1.8 percent today.
“The Swiss market is playing strong catchup,” said Benno Galliker, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland. “The main reason for the rally is yesterday’s positive day for global markets with the encouraging results from banks and ECB comments. Investors are in a good mood and there’s really no real alternative to equities at the moment. It looks like we may see more gains in the short term.”
The volume of shares changing hands in companies listed on the SMI was 36 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.
The ECB left its benchmark interest rate unchanged following a policy meeting yesterday. Draghi said that rates will remain low for an extended period of time.
In the U.S., a Labor Department report showed that payrolls increased by 162,000 in July, their smallest gain in four months. That was less than the 185,000 median forecast of economists in a Bloomberg survey. The jobless rate dropped to 7.4 percent last month, its lowest level since December 2008.
Data from the ADP Research Institute on Aug. 1 showed that American companies enrolled more workers in July than estimated. A release from the Labor Department yesterday showed first-time claims for jobless benefits unexpectedly fell.
UBS and Credit Suisse rose 3.5 percent to 18.86 Swiss francs and 2.3 percent to 27.82 francs, respectively. A gauge of European lenders rallied the most in four weeks yesterday as Societe Generale SA (GLE) and Lloyds Banking Group Plc reported profit that exceeded analysts’ estimates.
Nestle added 2.9 percent to 64.50 francs, contributing the most to the SMI’s gain.
Novartis increased 1.4 percent to 67.55 francs after saying the FDA has extended the age range for its meningococcal vaccine in the U.S. Babies younger than seven months are the most vulnerable to the disease, according to Novartis.
Swatch Group AG, the biggest maker of Swiss watches, added 3.1 percent to 567 francs, its largest gain in more than three months. Cie. Financiere Richemont SA, the owner of the Cartier brand, rose 2.6 percent to 92.95 francs, its highest price since at least April 1990.
To contact the reporter on this story: Corinne Gretler in Zurich at firstname.lastname@example.org
To contact the editor responsible for this story: Andrew Rummer at email@example.com