Swiss Stocks Retreat as IMF Warns on Bank Assets; ABB Ltd

Swiss stocks fell for a third day as the International Monetary Fund said Europe’s banks may have to shrink assets and Alcoa Inc. cut its forecast for global aluminum demand, indicating a slowdown in China.

ABB Ltd. dropped 1.5 percent to lead declines on the benchmark Swiss Market Index. EMS-Chemie Holding AG slid 1.5 percent after saying it sees an economic slowdown in Europe and possible weakening of growth in Asia and the U.S. Julius Baer Group Ltd. led gains, rising 1.4 percent.

The SMI slipped 0.3 percent to 6,629.04 at the close of trading in Zurich for the longest losing streak in nearly a month. The benchmark gauge has still surged 16 percent from this year’s low on June 4 as European Central Bank policy makers agreed on an unlimited bond-buying program and the Federal Reserve announced a third round of quantitative easing. The broader Swiss Performance Index dropped 0.4 percent today.

Alcoa’s “somewhat cautious outlook for the coming months chimes with the IMF’s downgrade to global growth, issued yesterday,” Chris Beauchamp, a market analyst at IG in London, wrote in e-mailed comments. “This goes some way to explaining why we are seeing further weakness in markets.”

The volume of shares in SMI-listed companies changing hands was 31 percent lower than the 30-day average today, according to data compiled by Bloomberg.

IMF Forecasts

The IMF said European banks may need to sell as much as $4.5 trillion in assets through 2013 if policy makers fall short of pledges to stem the fiscal crisis. The projection, from today’s IMF Global Financial Stability Report, is 18 percent higher than its April estimate.

The Washington-based IMF yesterday cut its 2012 global growth forecasts to 3.3 percent, the slowest since 2009.

Alcoa, the largest American aluminum producer, kicked off the U.S. earnings season by cutting its forecast for global consumption of the metal by 1 percentage point on slowing Chinese demand. The company reported third-quarter profit and sales that exceeded estimates.

ABB, the world’s largest manufacturer of power grids, fell

1.5 percent to 17.54 Swiss francs, retreating for a third straight day.

Roche Holding AG slid 1.2 percent to 181.20 francs, snapping four days of gains.

EMS-Chemie dropped 1.5 percent to 196.80 francs, the biggest decline in more than two weeks. The maker of engineering plastics for cars and electronics said sales in the first nine months of the year rose 5.9 percent to 1.35 billion francs ($1.4 billion). The company said it sees a clear economic slowdown in Europe and possible further weakening in the U.S. and Asia.

Dufry Gains

Dufry rose 0.7 percent to 114.70 francs, erasing an earlier loss. The operator of Hudson News stores in airports agreed to buy a 51 percent stake in Folli-Follie’s travel retail business to expand in the Mediterranean tourism market.

Dufry will pay 200.5 million euros ($258 million) for the stake, which it will finance by selling about 250 million euros of shares, the Basel, Switzerland-based company said.

Julius Baer, Switzerland’s third-biggest publicly traded bank, led gains, rising 1.4 percent to 31.81 francs.

Hochdorf Holding AG added 2.7 percent to 78.65 francs, rising for a sixth day. The company signed a supply agreement with two partners for Asian and Chinese Markets. Hochdorf could potentially supply 1,000 tonnes of infant formula annually by 2015 under the deal, according to a statement today.

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