Sept. 14 (Bloomberg) -- Swiss stocks advanced to a 16-month high after the Federal Reserve started a third round of quantitative easing that will release $40 billion a month into the world’s largest economy.
Adecco SA, the biggest supplier of temporary workers, jumped 4.2 percent. UBS AG and Credit Suisse Group AG, Switzerland’s biggest lenders, gained at least 2.5 percent. Cie. Financiere Richemont SA and Swatch Group AG climbed more than 3 percent.
The Swiss Market Index rose 0.7 percent to 6,559.16 at the close in Zurich, the highest since May 16, 2011. The gauge gained for a second week after Germany’s highest constitutional court approved the euro area’s permanent bailout fund. The SMI has rallied 15 percent from this year’s low on June 4. The broader Swiss Performance Index added 0.9 percent today.
“The Fed’s new measure was a positive surprise to investors in terms of its size and expected targets,” said Michael Borre, a chief equity adviser at Nordea Private Bank in Copenhagen. “Unless something unforeseen happens, we expect the the future to be less troublesome.”
The Fed said it will increase its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month. The central bank will continue to buy mortgage-backed securities until the outlook for the labor market substantially improves, the Federal Open Market Committee said yesterday in a statement at the end of its two-day meeting in Washington.
The FOMC also said it will probably hold the federal funds rate near zero until at least the middle of 2015. The Fed had said the rate would stay low through late 2014. Fed officials said economic growth will improve faster than they had projected, as they upgraded their estimates for 2013 and 2014.
Euro-area finance ministers and central-bank officials will hold a two-day meeting starting today in Cyprus to discuss plans for a banking union in the 17-nation currency zone.
Adecco jumped 4.2 percent to 48.68 Swiss francs for the second+biggest gain on the SMI.
UBS and Credit Suisse rose 4.1 percent to 12.52 francs and 2.7 percent to 21.51 francs, respectively, as a gauge of European banks rallied to the highest since March 27. Julius Baer Group Ltd. gained 2.1 percent to 34.18 Swiss francs, rising for an eight day.
Cie. Richemont, the maker of Montblanc pens and Cartier jewelry, increased 4.4 percent to 62.55 francs. Swatch Group advanced 3.1 percent to 409.40 francs.
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