Most Swiss stocks declined, halting the longest streak of gains for the Swiss Market Index since January, as investors weighed U.S. data to gauge whether the economy can withstand a reduction in monetary stimulus.
ABB Ltd. fell 0.9 percent after Exane BNP Paribas SA downgraded its rating of the largest supplier of power grids. UBS AG and Credit Suisse Group AG, Switzerland’s largest lenders, followed European bank shares lower. Swiss Re Ltd., the world’s second-biggest reinsurer, lost 1.6 percent after JPMorgan Chase & Co. lowered its recommendation for the stock.
The SMI dropped 0.1 percent to 7,732.62 at the close in Zurich, paring an earlier retreat of as much as 1.2 percent, as 13 of 20 stocks declined. The equity benchmark lost 3.3 percent in June and 1.7 percent in the second quarter as Federal Reserve Chairman Ben S. Bernanke said the central bank may reduce its bond buying if the U.S. economy recovers in line with its forecasts. The broader Swiss Performance Index slid less than 0.1 percent today.
“There are worries that quantitative easing has caused excessive risk-taking,” Neil Mackinnon, a global macro strategist at VTB Capital Plc told Mark Barton and Anna Edwards on Bloomberg Television. “Financial stability is important and Bernanke’s worst nightmare is a bond market or stock market crash, or both. Effectively they’ve run out of policy ammunition. My guess is Bernanke wants out of QE.”
In the U.S., factory orders rose 2.1 percent in May after increasing a revised 1.3 percent in the previous month, according to a report from the Commerce Department in Washington. Economists surveyed by Bloomberg had predicted a gain of 2 percent.
Data on Friday may show U.S. employers added 165,000 workers in June and that the unemployment rate in the world’s biggest economy dropped to 7.5 percent.
New York Fed President William C. Dudley speaks on regional and national economic conditions at 12:30 p.m. in Connecticut. Fed Governor Jerome Powell will address a Deutsche Bundesbank reception at 5:45 p.m. in New York about reforming international financial regulations.
ABB fell 0.9 percent to 20.54 Swiss francs. Exane cut its rating on the shares to neutral from outperform. Analysts led by Olivier Esnou cited the company’s reliance on China and other emerging markets as a risk.
UBS and Credit Suisse dropped 1 percent to 16.19 francs and 0.9 percent to 25.70 francs, tracking losses in a gauge of European lenders.
Swiss Re slid 1.6 percent to 69.45 francs as JPMorgan downgraded the stock to neutral from overweight, saying that the rates for natural-catastrophe reinsurance will decline.
Syngenta AG, the world’s biggest maker of crop chemicals, increased 1.2 percent to 373.8 francs. Goldman Sachs Group Inc. added the company to its “conviction buy” list, saying the company’s fundamentals remain strong and its balance sheet offers scope for acquisitions or returning money to shareholders.
The number of shares changing hands in SMI-listed companies was 25 percent lower than the average of the past 30 days, data compiled by Bloomberg showed.