Swiss stocks advanced, rebounding from their biggest weekly slump since August, amid rising speculation that euro-area leaders are taking steps to stem the region’s debt crisis.
Financial shares paced gains today, with UBS AG and Credit Suisse Group AG climbing more than 4 percent, as draft guidelines showed the region’s rescue fund may insure as much as 30 percent of sovereign bonds. Switzerland’s watchmakers advanced, with Swatch Group AG jumping 3.4 percent. Bank Sarasin & Cie AG plunged the most since at least 1990.
The Swiss Market Index, a measure of the biggest and most actively traded companies, rose 2.4 percent to 5,522.66 at the close in Zurich. The SMI declined 3.9 percent last week, the biggest drop since early August, as policy makers failed to agree on how to contain the euro area’s crisis. The gauge has rebounded 14 percent since its lowest level this year on Aug. 10. The broader Swiss Performance Index added 2.5 percent.
“The market once again draws hope that politicians finally convert words into action, this has boosted the markets, especially after the losses last week,” said Markus Wallner, an equity strategist at Commerzbank AG in Frankfurt. “This may only be a short-term upmove as even the smallest disappointment could turn the markets again.”
Germany and France plan a coalition of member states that will commit to greater fiscal discipline without waiting to change European Union treaties, Welt am Sonntag reported, without saying where it got the information. The agreement would take effect by the start of 2012.
UBS, Credit Suisse
Separately, German Finance Minister Wolfgang Schaeuble urged fast-track treaty changes to tighten budget discipline. Schaeuble said in an interview with ARD television in Berlin yesterday that treaty change is necessary to give veto power over member states’ budgets to the European Commission.
UBS and Credit Suisse, Switzerland’s largest lenders, rallied 4.1 percent to 10.53 Swiss francs and 5.8 percent to 21.07 francs, respectively. Swiss Re Ltd., the world’s second-biggest reinsurer, gained 5 percent to 46.37 francs and Zurich Financial Services AG added 4.4 percent to 193.50 francs. Swiss Life Holding AG rose 6.6 percent to 92.45 francs.
The European Financial Stability Facility may insure the bonds of debt-stricken countries with guarantees of 20 percent to 30 percent of each issue, depending on financial markets, according to EFSF guidelines that finance ministers will consider this week.
Swatch, Richemont Climb
Swatch, the world’s largest watchmaker, jumped 3.4 percent to 343.20 francs, the most in a month. Cie. Financiere Richemont SA, the maker of Jaeger-LeCoultre watches, rallied 4.4 percent to 47.12 francs after HSBC Holdings Plc raised its price estimate for the stock to 63 francs from 58 francs.
ABB Ltd., the world’s biggest maker of power-transmission gear, climbed 4.2 percent to 16.30 francs after Citigroup Inc. analyst Mark Fielding named ABB a “most preferred” stock.
Novartis AG rose 1.7 percent to 48.92 francs after the drugmaker said it gained commission approval for Rasitrio, a Rasilez-based triple combination pill to treat high blood pressure.
Aryzta AG, a Swiss supplier of bakery products to supermarkets and restaurants, increased 3.6 percent to 41.55 francs after saying first-quarter sales rose 3.9 percent.
Meyer Burger Technology AG, the top maker of solar panel-manufacturing equipment, added 6.9 percent to 17.15 francs. Robert Schramm-Fuchs, an analyst at Macquarie Research, raised the shares to “neutral” from “underperform.”
Bank Sarasin plunged 18 percent to 28 francs, its largest drop since at least March 1990. Safra Group agreed to buy Rabobank Groep’s controlling stake in the Swiss wealth manager for more than 1 billion francs ($1.1 billion) to expand private banking in Europe, the Middle East and Asia. Some investors had hoped for a higher offer from Julius Baer Group Ltd.
UBS cut the stock to “sell” from “neutral.” Zuercher Kantonalbank reduced its recommendation to “market perform” from “outperform.”