Swiss stocks retreated for a third day, with Actelion Ltd. and Swatch Group AG leading exporters lower, as the franc strengthened against the euro.
Actelion, which gets 94 percent of revenue outside Switzerland, dropped 2.9 percent as Exane BNP Paribas downgraded the biotechnology company. Swatch, the world’s largest maker of Swiss watches, declined 1.4 percent as UBS AG added the shares to its “least preferred” list. Kuehne & Nagel International AG slid 3.6 percent after Credit Suisse Group AG recommended selling the stock.
The Swiss Market Index lost 0.6 percent to 7,291.85 at the close of trading in Zurich, for the biggest three-day slide in more than two months. The gauge has still rallied 6.9 percent in 2013, the best start to a year since the measure was formed in 1988. The broader Swiss Performance Index also dropped 0.6 percent today.
“The pharma titles are weighing on the Swiss market as we see some profit taking,” said John Plassard, vice president at Mirabaud Securities LLP in Geneva. “Right now, investors seem happy to be taking a bit of a breather.”
The volume of shares changing hands in SMI-listed companies was 3.3 percent greater than the average of the last 30 days, data compiled by Bloomberg showed. The Swiss franc climbed 0.5 percent to 1.2355 per euro.
Sales of U.S. existing homes unexpectedly dropped in December. Purchases fell 1 percent to a 4.94 million annual rate, figures from the National Association of Realtors showed today. The median forecast of 79 economists surveyed by Bloomberg called for sales to increase to a 5.1 million rate.
The Bank of Japan delayed its new open-ended asset purchases program until the next year, disappointing some investors. The central bank plans monthly buying of 13 trillion yen ($145 billion) of securities from January 2014.
BOJ Governor Masaaki Shirakawa and six of his nine fellow board members voted for a 2 percent inflation target, to be achieved “at the earliest possible time.” This pace of price increases has not been sustained in Japan since the early 1990s.
In the euro area, finance ministers met yesterday as they seek an agreement in the first half of the year on how and when the 500 billion-euro ($666 billion) European Stability Mechanism can bypass governments and provide direct help to banks.
The SMI earlier pared a drop of as much as 0.8 percent as German investor confidence increased to the highest in 2 1/2 years. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations jumped to 31.5 this month from 6.9 in December.
Actelion dropped 2.9 percent to 46.50 francs, for the biggest decline on the SMI. Exane downgraded the stock to neutral from outperform, meaning investors should not buy any more of the shares.
Drugmakers Novartis AG and Roche Holding AG also declined. Novartis fell 1.3 percent to 60.10 francs and Roche retreated 0.7 percent to 197.30 francs, contributing the most to the SMI’s drop.
Swatch, which gets about 85 percent of sales from outside Switzerland, dropped 1.4 percent to 503 francs. UBS added the stock to its list of “least preferred” companies, saying Swatch may not immediately perform better than the rest of the luxury-goods industry.
Kuehne & Nagel fell 3.6 percent to 108.40 francs, the largest drop since April 16, after Credit Suisse downgraded the world’s biggest sea-freight forwarder to underperform, the equivalent of sell, from outperform.
“We expect earnings growth uncertainty in a questionable demand environment to pressurize Kuehne & Nagel’s multiple,” Credit Suisse wrote in a report.
GAM Holding AG lost 1 percent to 14.95 francs, trimming this year’s advance to 21 percent. Citigroup Inc. downgraded the asset manager’s shares to neutral from from buy, citing the recent rally.