Swiss stocks completed the biggest four-day advance this year, extending a 13-month high, amid optimism the European Central Bank will win support from policy makers to take steps to ease the euro area’s debt crisis.
UBS AG and Credit Suisse Group AG, Switzerland’s largest lenders, advanced. Vontobel Holding AG rallied 6.1 percent after MainFirst Bank AG recommended buying the company’s shares. Syngenta AG, the world’s biggest supplier of agricultural chemicals, retreated.
The Swiss Market Index rose 0.6 percent to 6,402.38 at the close of trading in Zurich. The gauge advanced 1.2 percent last week as German Chancellor Angela Merkel and French President Francois Hollande joined European Central Bank President Mario Draghi in promising to do everything to protect the euro. The SMI has rallied 12 percent from this year’s low on June 4. The broader Swiss Performance Index also climbed 0.6 percent today.
“The upcoming central-bank meetings this week will be carefully followed,” Christian Schmidt, a technical analyst for equities at Helaba Landesbank Hessen-Thueringen in Frankfurt, wrote in a report today. “Monetary-policy decisions in the U.S. and Europe are on the program and the expectations are high. It will be interesting to see how ECB President Draghi assesses the situation and whether there are hints at further measures.”
The volume of shares changing hands in companies listed on the SMI was 18 percent higher than the average of the last 30 days, according to data compiled by Bloomberg.
Draghi is trying to build consensus among governments and central bankers for a plan to ease borrowing costs for Spain and Italy before ECB policy makers hold their next meeting on Aug. 2. He needs to win over Bundesbank President Jens Weidmann, a critic of ECB bond purchases.
Draghi proposes using the euro area’s rescue fund to buy government bonds on the primary market, while the ECB purchases securities on the secondary market to ensure the transmission of its record-low interest rates, two central bank officials said on July 27 on condition of anonymity.
In the U.S., the Federal Open Market Committee will announce a policy decision on Aug. 1 after a report last week showed the economy expanded at a slower pace in the second quarter, giving the central bank scope to add to stimulus measures to spur growth.
In Greece, a finance ministry official said yesterday that representatives of the European Commission, the ECB and the International Monetary Fund may remain in the country until the government has completed work on a two-year, 11.5 billion-euro ($14 billion) budget plan.
Members of the so-called troika were due to leave at the end of July and return at the end of August to complete a review of the government’s budget cuts for this year and its plans for 2013 and 2014, the official said. That would have led to a significant delay in the next disbursement of loans to Greece, said the official, who asked not to be identified.
A gauge of European lenders rose 3.2 percent, contributing the most to the Stoxx Europe 600 Index’s advance. UBS jumped 3.9 percent to 10.93 Swiss francs.
Credit Suisse gained 0.5 percent to 16.83 francs as it said shareholders exercised 97 percent of subscription rights in mandatory convertible bonds for 1.9 billion francs ($1.94 billion). The bank placed the remaining notes with strategic investors, it said in a statement.
“The high take-up is a significant vote of confidence from both our new and existing investors,” Chief Executive Officer Brady Dougan said in the statement.
Vontobel climbed 6.1 percent to 21.65 francs, its highest price in more than two months, after MainFirst Bank raised the stock to buy from neutral.
Basilea Pharmaceutica AG added 2.8 percent to 49.85 francs. The company said it filed for European Marketing Authorization Application approval for its ceftobiprol drug for the treatment of pneumonia.
Syngenta slipped 0.8 percent to 335.60 francs after ING Groep NV cut the stock to sell from hold.