Swiss stocks rose to an almost six-month high as investors speculated central banks won’t rush to withdraw support to the economic recovery.
Sonova Holding AG rallied the most in a year after posting first-half revenue that beat analysts’ estimates and raising its financial targets. Swatch Group AG, Cie. Financiere Richemont SA and Nestle SA (NESN) also advanced.
The Swiss Market Index (SMI) rose 0.4 percent to 8,360.52 at 1:14 p.m. in Zurich, its highest level since May 22. The gauge advanced 1.1 percent last week as Federal Reserve chairman nominee Janet Yellen said she is committed to promoting a strong U.S. economic recovery and will ensure monetary stimulus isn’t removed too soon. The broader Swiss Performance Index also climbed 0.4 percent today.
“We are still positive on growth,” Joost van Leenders, who helps oversee about $645 billion as a strategist at BNP Paribas from Amsterdam, said by phone. “We still think Europe is relatively attractive but we need to see more earnings growth to move further out. Equities will gain next year but it really has to come from earnings.”
Economists in a Bloomberg survey estimate that policy makers in the U.S. will wait until a March 18-19 meeting to begin tapering bond purchases to $70 billion a month from $85 billion. The Fed’s decision to maintain the pace of stimulus has helped the MSCI World Index jump 21 percent this year.
Sonova (SOON) rose 6.9 percent to 126.40 Swiss francs, its biggest jump since November 2012 and highest price since March 2011. The hearing-aid maker said sales will probably rise 8 percent to 10 percent in local currencies in the 12 months through March, compared with the earlier forecast of a 6 percent to 8 percent gain.
The company also said earnings before interest, taxes and amortization will probably advance 11 percent to 14 percent in local currencies, compared with 9 percent to 13 percent predicted previously.
Swatch climbed 2.3 percent to 596.50 francs, while Richemont gained 0.4 percent to 93.05 francs. Nestle added 1.1 percent to 67.60 francs.
The SMI is trading at 16.23 times the projected earnings of its constituents, higher than the five-year average of 13.19 times.
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