Swiss stocks fell the most in seven week as Zurich Insurance Group AG reported profit that missed estimates and an unexpected drop in U.S. jobless-benefit claims fueled speculation the Federal Reserve will cut stimulus.
Zurich Insurance, Switzerland’s largest insurer, tumbled 3.6 percent for the biggest slide in four months. Novartis AG (NOVN) declined 1.2 percent and Roche Holding AG (ROG), the world’s biggest maker of cancer drugs, retreated 1.5 percent.
The Swiss Market Index (SMI) lost 1.2 percent to 7,982.43 at the close of trading in Zurich, retreating from an 11-week high. The benchmark gauge has still surged 17 percent this year as central banks around the world maintained stimulus measures. The broader Swiss Performance Index slipped 1.1 percent today as U.S. Treasuries fell, pushing the yield on the 10-year notes to the highest level in two years.
“Good news is bad news for markets at the moment,” Serge Berger, a Zurich-based trader at Blue Oak Advisors LLC, said in a telephone interview. “It’s the combination of Fed tapering fears, the unrest in Egypt that is also weighing on sentiment today, and the huge selloff in Treasuries that’s causing the big decline we’re seeing.”
In Egypt, the deathtoll from a crackdown on the supporters of ousted President Mohamed Mursi rose above 500 as members of the Muslim Brotherhood called for rallies nationwide. The army-backed government declared a state of emergency yesterday following the worst violence since Egypt’s 2011 uprising against Hosni Mubarak.
The volume of shares changing hands in SMI companies was 12 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.
The SMI has dropped 5.1 percent from its peak on May 22 as Fed Chairman Ben S. Bernanke said the U.S. central bank could pare stimulus measures if the economy improves as forecast.
A U.S. Labor Department report showed claims for unemployment benefits fell last week to the lowest level in almost six years. Jobless claims declined to 320,000 from a revised 335,000 a week earlier.
The U.S. consumer-price index increased 0.2 percent in July, boosting the case for tapering of Fed bond purchases.
Zurich Insurance (ZURN) fell 3.6 percent to 243 Swiss francs, the largest decline since April 8, as second-quarter net income dropped to $789 million from $1.09 billion a year ago on natural-catastrophe losses. That missed the $823.8 million average estimate of five analysts surveyed by Bloomberg. The company also said the target for its general insurance business is “challenging.”
A gauge of insurers was among the worst performers of the 19 industry groups in the Stoxx Europe 600 Index. Baloise Holding AG (BALN), Switzerland’s third-largest insurer, slid 1.3 percent to 100.60 francs. The company reports first-half results on Aug. 29.
Swiss Life Holding AG slipped 1.4 percent to 179.70 francs. The country’s biggest life insurer rallied 5.3 percent yesterday as first-half profit beat analysts’ projections.
Novartis, a Swiss drugmaker, lost 1.2 percent to 68.25 francs, snapping a four-day advance. Roche decreased 1.5 percent to 237.40 francs, contributing the most to the SMI’s drop.
Walter Meier AG (WMN) fell 4.1 percent to 50.85 francs even as the maker of air conditioning systems posted first-half net income of 30.5 million francs ($32.7 million), up from 22.2 million francs a year earlier.
“In order to grow, Walter Meier seems to continue to rely on acquisitions,” Alexander Koller, an analyst at Zuercher Kantonalbank AG in Zurich, wrote in a report today. “The significant increase in the tax rate could cause profit figures to decline in the near future.”
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