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Swiss Stocks Gain; Xstrata, Luxury-Goods Makers Lead Increase

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Swiss stocks increased, with the Swiss Market Index extending a three-week gain, after Group of 20 finance chiefs pledged to avoid “competitive devaluation.”

Swatch Group AG advanced 1.6 percent and Cie. Financiere Richemont SA surged 2.5 percent after LVMH Moet Hennessy Louis Vuitton SA said it would increase its stake in rival Hermes International SCA to 17 percent. Xstrata Plc rose 3.6 percent as base metals advanced in London and the dollar weakened. Swiss Reinsurance Co. lost 1.7 percent after BofA Merrill Lynch Global Research downgraded the shares.

The Swiss Market Index added 0.6 percent to 6,513.63 at the 5:30 p.m. close in Zurich, trimming its decline from this year’s high on April 15 to 6.5 percent. The broader Swiss Performance Index also rose 0.6 percent today.

“In terms of the meeting, there was perhaps firmer rhetoric than expected, but whether it can be put into practice is clearly another matter and one for the future,” Jim Reid, head of fundamental strategy at Deutsche Bank AG in London, wrote in a note to investors. “The desire seems to be to have the IMF have a greater role in policing these goals. The market is likely pleased that the summit passed without tensions flaring.”

G-20 finance ministers and central bankers ended talks in South Korea on Oct. 23 saying that they will refrain from “competitive devaluation” and allow markets to set foreign-exchange rates. The dollar weakened as the meetings omitted any U.S. pledge to refrain from further so-called quantitative easing.

Swatch, Richemont

Swatch, the maker of Omega and Breguet watches, gained 1.6 percent to 383.30 Swiss francs. Richemont, Switzerland’s largest jewelry maker, increased 2.5 percent to 49.61 francs. Hermes International SCA shares surged in Paris after LVMH announced it owns 14 percent of the company, with the option to increase the stake to 17 percent.

Xstrata climbed 3.6 percent to 20.25 francs as a gauge for basic-resources producers gained as much as 2.6 percent. Copper rose to the highest price in 27 months in New York and London as the dollar weakened amid speculation that the Federal Reserve will announce further bond purchases next week.

UBS AG increased 1.2 percent to 17.64 francs. Switzerland’s biggest bank will probably report a fourth straight quarterly profit tomorrow and the lowest wealth management redemptions since 2008.

The bank will post third-quarter net income of 1.16 billion francs ($1.2 billion), compared with a loss of 564 million francs a year earlier, according to the median estimate of 16 analysts surveyed by Bloomberg News. Net withdrawals by wealthy clients may have slowed to 2.6 billion francs from 26.6 billion francs, the survey found.

Swiss Re dropped 1.7 percent to 47.59 francs. BofA Merrill Lynch downgraded the world’s second-largest reinsurer to “underperform” from “neutral.”

The brokerage said in a note that “Swiss Re is particularly hurt by low interest rates and that it will be some time before levers can act to restore the return-on-earnings.”

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