Swiss stocks climbed for a seventh day, extending last week’s biggest gain for the benchmark Swiss Market Index since July 2009, after Italy proposed a 30 billion-euro ($40 billion) package to reduce its debt.
Credit Suisse Group AG and Zurich Financial Services AG paced European banks and insurers higher as borrowing costs declined for euro-area governments before this week’s European leaders summit. Givaudan SA paced declining shares after Deutsche Bank AG downgraded the stock.
The SMI, a measure of the biggest and most actively traded companies, rose 0.4 percent to 5,739.86 at the close in Zurich, for the longest winning streak since March. The gauge rallied 6 percent last week after central banks, including the Swiss National Bank, took action to ease Europe’s debt crisis. The broader Swiss Performance Index advanced 0.5 percent today.
“Everything seems to be pointing in the right direction and investors can be forgiven for hoping that politicians finally grasp the seriousness of the problem,” said Chris Beauchamp, a market analyst at IG Index in London. “This week has been billed as the final chance to save the euro.”
Italian Prime Minister Mario Monti presented an austerity plan to lawmakers in Rome today after his Cabinet approved the package yesterday, a day ahead of schedule, in a bid to trim the euro area’s second-biggest debt. The plan includes more than 12 billion euros in spending cuts and forces workers to delay retirement.
French, German Cooperation
Stocks extended gains as German Chancellor Angela Merkel and French President Nicolas Sarkozy pushed for a tightening of the European Union’s governing economic rules in a demonstration of unity on ending the debt crisis.
Merkel and Sarkozy said that the euro region’s two biggest economies were aligned on backing automatic penalties for deficit violators and locking limits on debt into euro states’ constitutions. The French leader said they aimed to reach consensus on the changes required by March.
In Ireland, Expenditure Minister Brendan Howlin detailed plans for cuts in government spending next year.
Credit Suisse rallied 2 percent to 23.33 Swiss francs as yields on Italian and Spanish government bonds declined and the cost of insuring European sovereign and financial debt fell to a one-month low.
Shares of insurers also advanced. Zurich Financial rose 1.3 percent to 208.80 francs and Swiss Re AG increased 0.6 percent to 49.69 francs.
Givaudan declined 2.6 percent to 838.50 francs after Deutsche Bank downgraded the world’s largest maker of flavors and fragrances to “sell” from “hold.”
Adecco SSA slipped 0.6 percent to 40.07 francs. U.K. rival Michael Page International Plc dropped 5.2 percent in London trading after the recruiter said full-year pretax profit will miss analysts’ estimates as markets continued to weaken amid “increased uncertainty and lower confidence.”