Most stocks in Switzerland advanced, trimming the Swiss Market Index’s weekly decline, as investors weighed comments by U.S. lawmakers to assess the prospects of a deal to end a partial government shutdown and avoid a default.
Lindt & Spruengli AG climbed 3.6 percent after the world’s largest producer of premium chocolate said it will buy back shares worth about 450 million Swiss francs ($500 million). Roche Holding AG, the world’s biggest maker of cancer drugs, retreated as health-care companies declined. Givaudan SA dropped for a seventh day.
The SMI rose less than 0.1 percent to 7,943.71 at the close in Zurich, as about two shares gained for every one that fell. The benchmark gauge has still retreated 1.4 percent this week as U.S. lawmakers failed to agree on a federal budget, partially closing government operations and setting up a showdown over the nation’s authority to borrow. The broader Swiss Performance Index also increased less than 0.1 percent today.
“The focus in the market is on the debt ceiling,” said Nils Rosendahl, a senior analyst at Nordea Markets in Stockholm. “The issue needs to be resolved by the interest payment on Nov. 15, otherwise there could be a default. That makes investors a bit nervous.”
House Speaker John Boehner said he does not want the U.S. to default on its debt. Democrats should negotiate with him and accept changes to President Barack Obama’s health-care law to reopen the government, he told reporters after a private meeting with House Republicans.
The U.S. shutdown has put as many as 800,000 federal employees temporarily out of work as lawmakers wrangle over the budget for the new financial year, which started Oct. 1.
Congress also faces a dispute over raising the $16.7 trillion debt ceiling this month. The Treasury has said that it will exhaust measures to avoid exceeding the borrowing limit on Oct. 17. If that happens, the government would run out of cash to pay all of its bills at some point between Oct. 22 and Oct. 31, according to the Congressional Budget Office.
Boehner has been telling his party that he won’t allow the U.S. to default on its debt, even if that requires Democratic votes, according to two Republican congressional aides.
The SMI rose 3.6 percent in September, extending its gain last quarter to 4.4 percent, as the Federal Reserve maintained the pace of its monthly bond purchases. The gauge has rallied 16 percent in 2013.
The volume of shares changing hands in SMI-listed companies today was 18 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.
Lindt & Spruengli climbed 3.6 percent to 44,430 francs. The chocolatier said it will start a new share buyback program, citing its strong cash position. The buyback will start at the end of October and last until the end of 2014, it said.
“Judging by the company’s net cash position of 543 million francs at the end of 2012 and the lack of suitable acquisition candidates, the new share buyback programme makes sense,” Patrick Hasenboehler, an analyst at J. Safra Sarasin, wrote in a note to clients. “Given its weak presence in emerging markets, Lindt is currently not affected by the softening growth rates in these markets.”
Forbo Holding AG added 1.2 percent to 700 francs after UBS AG upgraded the maker of floor coverings and conveyor belts to buy from neutral.
“We believe that the management’s perception of their relevant environment, especially on Europe, has improved recently,” Torsten Wyss, an analyst at UBS, wrote in a report today. “A turnaround of Forbo’s European business would mean a substantial positive operating leverage for the company.”
Roche dropped 0.8 percent to 239.20 francs. A gauge of European health-care companies was the second-worst performer of the 19 industry groups in the Stoxx Europe 600 Index.
Givaudan, the world’s biggest maker of flavorings, slipped 0.8 percent to 1,269 francs, the lowest price in more than a month. The stock has retreated for seven days, the longest losing streak since January 2011.