Stocks in Switzerland advanced, rebounding from the Swiss Market Index’s longest streak of weekly losses since November, as health-care companies rallied and U.S. retail sales topped forecasts.
Roche Holding AG, the world’s biggest maker of cancer drugs, added 1.9 percent. Novartis AG gained 1.1 percent. Kuehne & Nagel International AG, the world’s largest sea-freight forwarder, plunged the most since 2001 after first-quarter profit missed analysts’ estimates.
The SMI rose 0.9 percent to 6,124.91 at the close in Zurich. The gauge has advanced 3.2 percent in 2012 as the euro area sought to contain its debt crisis and as U.S. economic reports surpassed estimates. The broader Swiss Performance Index gained 0.6 percent today.
“There is a sense in the markets that there was some overselling last week,” said Lorne Baring, managing director at B Capital SA in Geneva, which oversees almost $500 million. “That, along with the focus on the U.S. earnings season, has given the markets a breather. However, it would only need a minor disappointment this week as the earnings season kicks in for there to be downside risk for equity investors.”
Earnings per share at Standard & Poor’s 500 Index companies rose 1.7 percent in the first quarter and will grow 8.6 percent this year, according to analysts’ estimates compiled by Bloomberg.
The volume of shares changing hands in the SMI was 3 percent higher today than the average of the last 30 days, according to data compiled by Bloomberg.
Spain’s government is battling to quell renewed market turmoil over its finances as the nation’s borrowing costs soared to the highest levels this year. Crisis-fighting resources will dominate talks at the International Monetary Fund’s spring meeting in Washington from April 20-22.
The yield on 10-year Spanish bonds increased eight basis points to 6.04 percent. The nation’s debt risk climbed to a record for a second day, according to credit-default swap prices from CMA.
“The bond market is shaky,” Baring said. “It’s unusual to see stress in bond markets, but a steady stock market. We may see later on either one of the markets changing direction, and it’s quite possible it will be the equity market following the bond market.”
Swiss stocks extended gains after a U.S. report showed that retail sales in the world’s largest economy rose 0.8 percent in March after a revised 1 percent advance in February. The median forecast of 71 economists called for a 0.3 percent increase in a Bloomberg News survey. A separate release showed that manufacturing in the New York region expanded at the slowest pace in five months.
Roche gained 1.9 percent to 160 Swiss francs. Der Sonntag reported that the company started research on vaccines for AIDS, tuberculosis and Hepatitis C in early April. The newspaper cited spokeswoman Claudia Schmitt.
Novartis, a Basel, Switzerland-based drugmaker, increased 1.1 percent to 50.40 francs.
Swatch Group AG, the world’s biggest watchmaker, rose 1.3 percent to 425 francs and Cie. Financiere Richemont SA, the owner of the Cartier brand, increased 2 percent to 56.70 francs. Citigroup Inc. rated the luxury sector a “structural buy,” citing potential for material earnings upgrades later this year from revenue beats.
Burkhalter Holding AG jumped 5.4 percent to 273.25 francs, its highest price since May 2011. Switzerland’s biggest electrical installations company said 2011 profit was 21.7 million francs, up from 19.1 million francs a year earlier. The company also said it will pay a dividend of 16 francs a share, adding it is “optimistic” for 2012.
Kuehne & Nagel
Kuehne & Nagel slumped 9.5 percent to 107.80 francs, its largest drop since October 2001, after reporting that net income excluding one-time payments dropped to 133 million francs from 155 million francs a year earlier. That missed the average estimate of seven analysts surveyed by Bloomberg for profit of 143 million francs.
“Market conditions for freight forwarders remain challenging with global trade volumes below historic averages and continued pressure on yields,” Michael Foeth, an analyst at Vontobel Holding AG, wrote in a note to clients today. “The benefits of Kuehne & Nagel’s growth strategy continue to reflect in high volume growth, but at a cost which depresses margins.”