Swiss stocks advanced, after retreating the most in three weeks yesterday, as Swatch Group AG climbed and policy makers weighed options for keeping Cyprus in the euro area.
Swatch, the world’s largest maker of Swiss watches, rose the most in almost three weeks after Nomura Holdings Inc. said the stock remains one of its top picks. Dufry AG jumped the most in four months as UBS AG raised its rating on the shares.
The Swiss Market Index gained 0.8 percent to 7,847.7 at the close of trading in Zurich, after falling yesterday before Cypriot lawmakers rejected a 5.8 billion-euro ($7.5 billion) bank-deposit levy. The broader Swiss Performance Index added 0.7 percent today.
“Investors seem to have realized that the euro won’t go under and that the euro zone won’t break up because of Cyprus,” said Alessandro Fezzi, senior market analyst at LGT Bank Schweiz AG in ZurichMarket. “Sentiment has changed very quickly, and fundamentals still look quite good.”
The equity benchmark last week climbed to its highest level since January 2008, as reports pointed to a strengthening global economy amid speculation that central banks will maintain stimulus measures.
The volume of shares changing hands in SMI-listed companies today was 6.3 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.
Luxembourg Finance Minister Luc Frieden called for the 17 euro-area finance ministers to reconvene quickly to put together a new package for Cyprus, after the rejection of the levy threw the earlier bailout plan into limbo.
The European Central Bank will also have to decide whether to give Cyprus more time or consider cutting off liquidity to the country’s banks.
Swatch rose 2.3 percent to 543.50 Swiss francs, for the biggest gain on the SMI. Nomura said Swatch remains one of its top picks as it exploits “the Chinese middle-class opportunity.”
Dufry climbed 3.3 percent to 120.50 francs, the most since Nov. 19. UBS raised its recommendation for the operator of duty-free shops to buy from neutral.
“Its cash generation is strong and the return to like-for like growth in the second half of 2013 should be a key catalyst to support the shares,” Joern Iffert, an analyst at UBS, wrote in a note to clients today.
Novartis AG gained 1.2 percent to 67.25 francs. Roche Holding AG added 0.9 percent to 219.70 francs.
Komax Holding AG rallied 6.4 percent to 89.35 francs, the highest price since May. The manufacturer of wire processing machines is considering all options, including a sale, for its medical-technology and solar units, Finanz und Wirtschaft newspaper reported, citing Chairman Leo Steiner.