Most Swiss stocks advanced, after the Swiss Market Index yesterday posted its biggest decline in a week, as investors weighed the impact of a partial shutdown of the U.S. government.
Credit Suisse (CSGN) Group AG and Julius Baer Group Ltd. climbed more than 2 percent. Sonova (SOON) Holding AG declined 3.2 percent after Citigroup Inc. lowered its rating on the world’s largest maker of hearing aids.
The SMI (SMI) added 0.2 percent to 8,037.13 at 2:21 p.m. in Zurich as two stocks rose for every one that fell. The equity benchmark advanced 3.6 percent in September, extending its gain last quarter to 4.4 percent, as the Federal Reserve refrained from reducing its monthly bond purchases. The gauge has rallied 18 percent so far in 2013, the third-best performance by a European developed market. The broader Swiss Performance Index also rose 0.2 percent today.
“Some of the U.S. shutdown news has been discounted already,” said Konstantin Giantiroglou, head of investment advisory at Neue Aargauer Bank in Brugg, Switzerland. “I would not bet too much on this surprising resilience. Market participants think that this government shutdown will not have a major economic impact.”
The volume of shares changing hands in SMI-listed companies was 10 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.
U.S. lawmakers missed a midnight deadline to agree on a budget and continue funding the government. The shutdown will put as many as 800,000 federal employees out of work temporarily and halt some services.
Democrats and Republicans had no immediate plans for further budget negotiations, raising concerns among some lawmakers that the two sides will also struggle to forge a deal on raising the U.S. debt limit. The nation will run out of money to pay all of its bills at some point between Oct. 22 and Oct. 31 unless Congress approves an increase in the borrowing authority, according to the Congressional Budget Office.
Credit Suisse climbed 2.6 percent to 28.33 Swiss francs as Bank of America Corp. reiterated its buy recommendation on Switzerland’s second-largest lender.
“Credit Suisse will be in a strong position to raise dividends significantly next year, which would send very strong signals about its business model and cash flow,” analysts led by Michael Helsby said.
Julius Baer, the Swiss bank founded in 1890, advanced 2.3 percent to 43.18 francs. UBS AG (UBSN), the nation’s largest lender, gained 1.2 percent to 18.72 francs as bank shares climbed across Europe.
Sonova dropped 3.2 percent to 108.80 francs. Citigroup reduced its rating to neutral from buy, saying “the current valuation fully reflects the revenue and earnings growth on offer.”
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