Swiss Stocks Drop on Greek Debt Talks; Baer, Banks Fall

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Most Swiss stocks retreated as Greece’s talks with private bondholders for a debt-swap agreement continued and as a meeting of the nation’s political leaders was delayed until tomorrow.

Julius Baer Group Ltd., the Swiss wealth manager founded in 1890, slid the most since October after full-year profit declined. Straumann Holding AG and Nobel Biocare AG fell as Jefferies Group Inc. downgraded the stocks. Drugmakers Roche Holding AG and Novartis AG advanced.

The Swiss Market Index, a measure of Switzerland’s biggest and most actively traded companies, declined 0.1 percent to 6,147.03 at the close in Zurich. The benchmark gauge advanced 2 percent last week as investors speculated that the euro area will contain its sovereign-debt crisis and as the U.S. jobless rate fell to the lowest in three years. The SMI has climbed 3.6 percent this year. The broader Swiss Performance Index also retreated 0.1 percent today.

“The market is extremely nervous before the Greek government gives an answer on the haircut that will be applied to their debt for international private creditors,” said John Plassard, director at Louis Capital Markets SA in Geneva. “It can be expected that the Greek government won’t keep their promise about the public spending cuts, so the level of the haircut will be closely watched.”

European leaders stepped up pressure on Greek politicians to meet the conditions of a 130 billion-euro ($171 billion) bailout, saying time was running out. Greece’s interim prime minister Lucas Papademos secured a tentative deal with political parties yesterday to cut spending and boost economic competitiveness.

Meeting Delayed

Papademos today planned to confer with the so-called troika of international lenders in Athens. A gathering of Greek political leaders was delayed by a day until tomorrow as they struggled for a unified response.

China’s economic expansion would be cut almost in half if Europe’s debt crisis worsens, the International Monetary Fund said. Based on the IMF’s “downside” forecast for the global economy, China’s growth could drop by as much as 4 percentage points from the fund’s current projection, which is for 8.2 percent this year, the organization said in a report released today by its China office in Beijing.

Julius Baer retreated 3.8 percent to 36.40 Swiss francs, the largest retreat since Oct. 31, after it said full-year net income declined 27 percent to 258 million francs ($280 million). Baer also said it will probably have to pay a fine to resolve tax matters with U.S. authorities.

Banks Fall

UBS AG and Credit Suisse Group AG, Switzerland’s largest lenders, fell 1.8 percent to 13.21 francs and 2.1 percent to 25.16 francs, respectively. A gauge of banking shares was among the worst performers of the 19 industry groups in the Stoxx Europe 600 Index.

Straumann, the world’s biggest maker of dental implants, slipped 0.6 percent to 173.80 francs and Nobel Biocare lost 2.1 percent to 13.25 francs. Both stocks were downgraded to “hold” from “buy” at Jefferies.

ABB Ltd., the world’s biggest maker of power-transmission gear, dropped 0.8 percent to 19.96 francs, its first loss in five days. UBS lowered its recommendation for the stock to “neutral” from “buy.”

Roche, the world’s biggest maker of cancer drugs, gained 0.7 percent to 158 francs while Novartis added 0.7 percent to 51.70 francs. The two companies make up about 33 percent of the SMI.

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