Stocks in Switzerland slid, posting their biggest two-day retreat in two months, as concern grew that the U.S. and allied nations will take military action against Syria after a suspected chemical-weapons attack.
Swatch Group AG and Cie. Financiere Richemont SA dropped following a report that China will levy a consumption tax on a greater range of luxury goods. Holcim Ltd., the world’s biggest cement maker, fell as India’s rupee weakened for a third day.
The Swiss Market Index declined 1.4 percent to 7,776.01 at the close in Zurich, taking the two-day drop to 3.1 percent. The equity benchmark has still advanced 13 percent so far this year as the European Central Bank pledged to keep interest rates low for a prolonged period of time. The broader Swiss Performance Index slid 1.3 percent today.
“The situation in Syria makes life complicated for policy makers because a sustained spike in the price of oil is not good for the global growth outlook,” Tristan Hanson, who helps oversee about $1.5 billion as head of asset allocation at Ashburton Ltd. in London, said in a phone interview today. “It is very hard to know at this stage whether the events in Syria will have any economic impact or not.”
West Texas Intermediate crude surged to its highest price since February 2012 on concern that the conflict in Syria will spread and threaten oil supplies from the Middle East. The U.S., France and Britain have moved closer to military action against Syria, laying out the justification, putting forces into place and rounding up allies in the region.
The countries will focus any armed response on Syria’s weapons capabilities and wouldn’t direct it at deposing President Bashar al-Assad, U.S. and U.K. officials said. British Prime Minister David Cameron said in London that any course of action will be legal and proportionate.
The volume of shares changing hands in SMI-listed companies was 27 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.
Swatch Group, the biggest maker of Swiss watches, fell 2.7 percent to 539.50 francs and Cie. Financiere Richemont SA, the owner of the Cartier and Alfred Dunhill businesses, declined 2.3 percent to 88.10 francs.
The official Xinhua News Agency reported that the government will adjust the rate of consumption tax on some goods, a sign that high-end brands may become more expensive to buy on the mainland. The news agency didn’t specify which items will be affected by the changes.
Holcim, which generated almost 40 percent of its revenue from Asia in 2012, slipped 1.9 percent to 63.75 francs. India’s rupee slid as much as 3.9 percent today. Surging oil prices threaten to worsen the country’s current account and push the economy toward its biggest crisis since 1991.
Separately, Cemex SAB said it will swap assets with Holcim. The biggest cement maker in the Americas will acquire Holcim’s Czech operations, while the Jona, Switzerland-based company will obtain Cemex’s plants in western Germany. The two cement makers will combine operations in Spain, they said in a statement.
UBS AG, Switzerland’s largest bank, retreated 0.7 percent to 18.13 francs. Credit Suisse Group AG, the country’s second-biggest lender, dropped 1.6 percent to 27.16 francs. The Swiss Finance Ministry said it has agreed with the U.S. on a draft plan to settle a tax-evasion dispute.