Swiss stocks rose for a fourth day, extending an 11-week high, as Swiss Life Holding AG reported profit that beat estimates and the euro-area economy grew more than forecast.
Swiss Life, Switzerland’s biggest life insurer, rallied to the highest price in almost five years. Novartis AG climbed for a fourth day as Chairman Joerg Reinhardt said the drugmaker will start a strategic review of its units as early as next week and would consider a $10 billion purchase among options for bolstering the business.
The Swiss Market Index advanced 0.5 percent to 8,078.26 at the close of trading in Zurich. The benchmark gauge has surged 18 percent this year as central banks around the world maintained stimulus measures. The broader Swiss Performance Index also added 0.5 percent today.
“We have positive data out today that confirms recent signs of a recovery,” said Markus Wallner, an equity strategist at Commerzbank AG in Frankfurt. “Still, the market is rather lackluster after the gains we’ve seen in the past few weeks.”
The volume of shares changing hands in SMI companies was 2.6 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.
The euro area’s economy emerged from a record-long recession in the second quarter, led by Germany and France, amid the first sustained period of financial-market calm since the start of the debt crisis. Gross domestic product expanded 0.3 percent after a 0.3 percent contraction in the previous three months, the European Union’s statistics office said today. That exceeded the median estimate of 0.2 percent growth in a Bloomberg survey of 41 economists.
The SMI has still declined 3.9 percent from its peak on May 22 as Federal Reserve Chairman Ben S. Bernanke indicated the U.S. central bank could pare stimulus measures if the economy improves as forecast.
The Federal Open Market Committee will probably reduce its $85 billion in monthly bond buying at its next meeting on Sept. 17-18, according to 65 percent of economists surveyed by Bloomberg from Aug. 9 to Aug. 13. In a survey last month, half of economists predicted a cut in purchases at that meeting.
“Underlying sentiment is still positive, but with the second-quarter earnings season heading toward an end, there are no real new positive impulses for the market for now,” Wallner said. “We also still have the Sword of Damocles hanging above us that the Fed will reduce its bond purchases.”
Swiss Life jumped 5.3 percent to 182.20 Swiss francs, the highest since September 2008, as first-half net income rose to 472 million francs ($506 million) from 364 million francs a year earlier. That exceeded the 367.9 million-franc average estimate of seven analysts surveyed by Bloomberg. The shares have rallied 50 percent this year.
“The Swiss Life stock has had an exceptionally good run year to date,” Dominik Studer, an analyst at J. Safra Sarasin, wrote in a report to clients today. “Even though this has led the valuation gap to close to some extent, we see further upside potential thanks to the group progressing well towards its 2015 targets.”
Novartis rose 1 percent to 69.05 francs, contributing the most to the SMI’s gain, as Reinhardt said the company is willing to invest “significant money for a very good opportunity.”
Separately, people familiar with the matter said the drugmaker won’t bid for Onyx Pharmaceuticals, as Onyx’s current valuation makes it too expensive for Novartis.
GAM Holding AG added 1.5 percent to 17.15 francs. The shares have advanced for six days, the longest winning streak since December 2010. UBS AG raised its recommendation on the asset manager to buy from neutral, saying it sees potential for the stock to rise further. GAM rallied 9.7 percent yesterday after saying first-half profit more than tripled.
Tecan Group AG gained 5.2 percent to 95.50 francs, the highest price since April 2002. The maker of laboratory equipment reiterated its outlook for 2013 and said first-half earnings before interest and taxes rose to 23.1 million francs from 22.4 million francs a year earlier.
“We enjoyed a noticeably positive trend with double-digit sales growth and increased order entry” in the second quarter,’’ Chief Executive Officer David Martyr said in a statement today.