Swiss stocks fell from a four-month high, trimming the benchmark Swiss Market Index’s weekly gain, as surging Spanish bond yields stoked concern the euro-area debt crisis is deepening.
UBS AG and Credit Suisse Group AG were among the biggest decliners, tumbling 4.4 percent and 2.9 percent respectively. Galenica AG dropped after the stock was downgraded at Vontobel Holding AG. ABB Ltd. advanced 1 percent for the largest gain on the SMI.
The SMI retreated 0.6 percent to 6,284.81 at the close of trading in Zurich even as euro-region finance ministers approved a bailout of Spain’s banks. The measure still climbed 1.7 percent this week and has rallied 10 percent from its 2012 low on June 4. The broader Swiss Performance Index also slipped 0.6 percent today.
“European markets and the euro have taken a turn for the worse today, smacked by headlines out of Spain,” Ishaq Siddiqi, a market strategist at ETX Capital in London, wrote in a note. “Although EU finance ministers have adopted the Spanish bank bailout, sentiment has been rattled by Spain painting a bleaker outlook than previously by downgrading its economic growth forecasts.”
Spain said the recession will extend into next year as the region of Valencia prepared to seek a rescue from the central government. Gross domestic product will fall 0.5 percent in 2013 instead of rising 0.2 percent as the government predicted April 27, Budget Minister Cristobal Montoro said after the Cabinet met today in Madrid.
The Spanish 10-year yield rose 27 basis points to 7.28 percent at 4:36 p.m. Zurich time, pushing the spread over equivalent German bunds 22 basis points wider to 613 basis points, the most since Bloomberg began compiling the data in 1993. The yield on the nation’s five-year notes increased to a euro-era record of 6.90 percent.
Euro-region finance ministers gave final approval to a bailout of the nation’s banks worth as much as 100 billion euros ($122 billion). Today’s decision paves the way for a first payment from Europe’s temporary rescue fund, the European Financial Stability Facility.
The volume of shares in SMI-listed companies changing hands today was 55 percent more than the average over the past 30 days, according to data compiled by Bloomberg.
UBS, Switzerland’s largest lender, snapped two days of gains, falling 4.4 percent to 10.03 Swiss francs. Credit Suisse retreated 2.9 percent to 16.83 francs. Julius Baer Group Ltd., the wealth manager established in 1890, dropped 0.9 percent to 34.69 francs.
Adecco SA, the world’s largest provider of temporary workers, declined 3.1 percent to 41.54 francs, halting five days of gains.
Galenica, the largest producer of iron replacement drugs, retreated 5 percent to 591 francs as Vontobel cut the stock to reduce from hold. The Bern, Switzerland-based company will probably face a delay in gaining U.S. approval for its Injectafer treatment and the drug’s use may be limited, Carla Baenziger, an analyst at Vontobel in Zurich, wrote in a note.
Logitech International SA, the world’s biggest maker of computer mice, lost 3.5 percent to 9.30 francs. The stock was cut to hold from buy at Kepler Capital Markets.
ABB, a maker of robots and power-transmission gear, advanced 1 percent to 15.96 francs.
Sulzer AG rose 2.7 percent to 124 francs. The Swiss pump maker reported first-half earnings before interest and taxes of 193.4 million Swiss francs ($197 million), missing the 203.1 million-franc average of seven analyst estimates compiled by Bloomberg. Sales increased 9.2 percent to 1.92 billion francs, driven by growth in oil and gas industry orders in North America and Russia.