May 16 (Bloomberg) -- Most Swiss stocks advanced, rebounding from the lowest level this year, as Cie. Financiere Richemont SA rallied after earnings topped estimates.
Richemont, the owner of the Cartier brand, surged 8.1 percent after profit topped analysts’ estimates. Swatch Group AG, the world’s biggest watchmaker, jumped 2.7 percent. Straumann Holding AG increased 9.1 percent as the biggest maker of dental implants said it plans to more than double in size.
The Swiss Market Index rose 0.1 percent to 5,872.73 at the close in Zurich as 12 stocks rose and eight declined. The measure retreated to the lowest level since Dec. 22 yesterday as Greece’s May 6 election left it struggling to form a government. The broader Swiss Performance Index gained 0.2 percent today.
“Western stock markets and key risk-centric proxies are likely to activate a temporary relief rally from very oversold price conditions,” said Ron William, a technical strategist at MIG Bank in Lausanne, Switzerland. “Uncertainty remains, though, and the social mood remains in a bearish cycle and market volatility is likely to rise from its historic lows.”
President Karolos Papoulias failed in a bid to broker a governing coalition in meetings yesterday with party leaders in Athens. Panagiotis Pikrammenos, head of Greece’s Council of State, the highest administrative court, will be sworn in as head of the caretaker administration later today.
The new elections will probably be held on June 17. A formal announcement of the date will be made after the new parliament is sworn in tomorrow and then dissolved.
Greek central bank chief, George Provopoulos, told Papoulias this week that financial institutions are becoming anxious about their prospects as Greeks pull out cash after the inconclusive May 6 elections, according to the transcript of the president’s meeting with party leaders on May 14 that was published yesterday.
German Chancellor Angela Merkel and new French President Francois Hollande said they would consider measures to spur economic growth in Greece as long as voters committed to the austerity demanded to stay in the euro.
The European Union may also “approach Greece with proposals,” Merkel said late yesterday at a joint press conference with Hollande during his first official visit to Berlin. “Greece can stay in the euro area,” and “Greek citizens will be voting on exactly that,” she said.
In the U.S., a Commerce Department report showed builders broke ground on more homes than anticipated, indicating the residential real estate industry is stabilizing. Starts rose 2.6 percent to a 717,000 annual rate from March’s revised 699,000 pace that was stronger than previously reported.
The number of shares changing hands in SMI-listed companies today was 25 percent higher than the 30-day average, according to data compiled by Bloomebrg.
Richemont jumped 8.1 percent to 57.65 Swiss francs, heading for the biggest rally since August, after reporting full-year net income of 1.54 billion euros ($1.96 billion), exceeding the average 1.36 billion-euro analyst estimate. Revenue was 8.87 billion euros, more than the 8.63 billion euros analysts had projected. The company will buy back as much as 1.7 percent of its shares.
Swatch advanced 2.7 percent to 397.50 francs.
Straumann surged 9.1 percent to 159.90 francs, the biggest gain since November 2008, as it said it aims to “more than double” its current size by 2020 in terms of net revenue and employees. The company forecast a gross margin in the range of 76 percent to 78 percent and an operating margin of as much as 25 percent in 2020.
Straumann is also buying a 49 percent stake in Neodent, a privately-held Brazilian dental implant company, for 260 million francs ($276 million) in cash.
Transocean Ltd. climbed 0.9 percent to 41.48 francs after Nigel Browne, an analyst at Macquarie Group Ltd., raised the stock to neutral, the equivalent of hold, from underperform.
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