May 23 (Bloomberg) -- Swiss stocks fell, snapping a two-day rally, as investors awaiting a meeting of European Union leaders in Brussels grew more concerned that Greece will be forced to leave the euro.
Credit Suisse Group AG, Switzerland’s second-largest lender, declined 2.3 percent, following European banks lower. Swatch Group AG and Cie. Financiere Richemont SA slumped more than 4 percent.
The Swiss Market Index retreated 1.6 percent to 5,817.91 at the 5:30 p.m. close in Zurich, extending this year’s decline to 2 percent. The gauge gained 1.9 percent over the past two days amid speculation that China and the euro area will act to bolster economic growth. The Swiss Performance Index lost 1.5 percent today.
“Today’s decline confirms the bearish environment,” said Michael Scholz, an equity strategist at WestLB AG in Dusseldorf, Germany. “Since the gains in the past two days neutralized the oversold extreme, there’s now room for new lows.”
The volume of shares changing hands in SMI-listed companies was 10 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.
The leaders of the EU meet in Brussels today to discuss the sovereign-debt crisis that has wiped about $4 trillion from equity markets worldwide this month.
The U.S. economy will probably tip back into recession next year if Congress doesn’t address an impending “fiscal cliff,” the Congressional Budget Office said.
The nonpartisan agency said in a report yesterday that the world’s largest economy would contract at an annual rate of 1.3 percent in the first half of 2013 if lawmakers allow the George W. Bush-era tax cuts to expire as scheduled and $1.2 trillion in government spending cuts take effect in January.
Credit Suisse declined 2.3 percent to 19.02 Swiss francs. The company bought $690.6 million of debt from the Federal Reserve Bank of New York’s Maiden Lane III LLC portfolio, the district bank said late yesterday.
Financial shares declined, with Julius Baer Group Ltd. slipping 2.7 percent to 30.49 francs and Swiss Life Holding AG, Switzerland’s biggest life insurer, dropping 2.1 percent to 81.95 francs. Zurich Insurance Group AG decreased 2.3 percent to 200.10 francs.
Swatch, the world’s largest watchmaker, lost 4.8 percent to 375.50 francs and Richemont, the owner of the Cartier brand, retreated 4.2 percent to 56.25 francs.
Oridion Systems Ltd. gained 1.5 percent to 20.90 francs, its biggest advance in seven weeks, after its shareholders approved a merger with Covidien Plc.
To contact the reporter on this story: Corinne Gretler in Zurich at firstname.lastname@example.org
To contact the editor responsible for this story: Andrew Rummer at email@example.com