Swiss stocks were little changed, with the benchmark index heading for a monthly advance, as UBS AG climbed after taking steps to boost its common equity ratio.
UBS rose to its highest price since March 2011 after saying it has surpassed its year-end target for reducing risk-weighted assets and it will buy back a fund managing its toxic assets. Clariant AG added 2.8 percent after earnings beat estimates. Novartis AG and Roche Holding AG, which together account for 36 percent of the Swiss Market Index by weight, fell.
The SMI slid less than 0.1 percent to 7,810.17 at the close of trading in Zurich, after swinging between gains and losses at least 22 times. The measure is heading for a 1.7 percent increase in July as the U.S. central bank said it remains flexible on the pace of asset purchases. The broader Swiss Performance Index added less than 0.1 percent today.
“The general fundamentals in Europe are picking up,” said Patrick von Koss, partner at Avalor Investment AG in Zurich. His firm oversees more than $1.1 billion. “Analysts are upgrading European markets, and flows and earnings are improving. In the U.S., Japan, and in Europe central banks are still supporting the economy.”
The European Central Bank and the Bank of England announce policy decisions on Thursday, while the Federal Reserve concludes its two-day meeting tomorrow. The Fed will maintain its benchmark interest rate at 0.25 percent in a policy decision after the meeting, economists predicted. The central bank will begin to reduce its bond-purchase program in September, according to economists surveyed by Bloomberg.
UBS rose 2.3 percent to 18.15 Swiss francs. Switzerland’s largest lender said it will buy back the so-called bad bank set up by the Swiss National Bank to help it shed toxic assets. That will increase the bank’s common equity ratio under Basel III rules by 70 basis points to 90 basis points in the fourth quarter, UBS said.
UBS’s investment bank posted a pretax profit of 775 million francs ($833 million) in the second quarter, compared with a 92 million-franc loss a year earlier. UBS last week posted preliminary earnings that beat analysts’ estimates.
Clariant added 2.8 percent to 14.51 francs, its largest gain since May 28. The chemicals maker posted better-than-estimated second-quarter profit and said it is confident of achieving its full-year targets.
Bucher Industries AG climbed 4.1 percent to 232 francs, for its biggest increase in three months, after the maker of food-processing machinery said first-half profit climbed to 95.1 million francs, from 91.1 million in the same period last year.
Novartis fell 0.6 percent to 66.25 francs and Roche slid 0.8 percent to 231.50 francs. A gauge of European drugmakers was one of the worst-performing industry groups on the Stoxx Europe 600 Index.