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Swiss Stocks Post Worst Three-Day Drop Since August

Oct. 9 (Bloomberg) -- Swiss stocks fell, posting their biggest three-day loss since August, as a U.S. government shutdown entered its ninth day without an end in sight to the deadlock over fiscal spending and the borrowing limit.

Syngenta AG lost 2.1 percent, for the third-worst performance on the benchmark Swiss Market Index. Tecan Group AG dropped 4 percent after the maker of laboratory equipment lowered its sales forecast for 2013.

The SMI slipped 0.9 percent to 7,755.26 at the close in Zurich. The gauge has retreated 3.3 percent so far this month as U.S. lawmakers failed to approve an emergency federal budget, partially closing the government. The broader Swiss Performance Index decreased 0.9 percent today.

“The ongoing U.S. budget dispute still sours the mood of investors,” Peter Buergler, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland, wrote in a report today. “Swiss stocks should be rather weak today. The entrenched fronts in the U.S. budget dispute don’t lure market participants out of hiding.”

President Barack Obama said yesterday that the U.S. economy risks a “very deep recession” if Congress fails to raise the government’s $16.7 trillion borrowing limit. He insisted that he wouldn’t negotiate against the threat of default or a government shutdown, though he was willing to consider a short-term debt-ceiling increase without conditions.

Test Vote

Obama spoke as Senate Democrats started setting up a test vote for later this week on a plan that would push the next debt-limit fight into 2015.

The Treasury has said that it will exhaust measures to avoid exceeding the borrowing limit on Oct. 17. If that happens, the government will 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.

Separately, Obama will nominate Janet Yellen as chairman of the Federal Reserve in an announcement at 3 p.m. in Washington, a White House official said in an e-mailed statement. Yellen, 67, would succeed Ben S. Bernanke, whose term expires on Jan. 31.

“Investors have taken the message about Janet Yellen positively,” Buergler wrote. “Investors expect that Yellen will continue the loose monetary policy of Bernanke and will begin the throttling of economic support rather later than sooner.”

Syngenta, Tecan

Syngenta, the world’s largest maker of crop chemicals, fell 2.1 percent to 352.5 Swiss francs. Bank of America Corp. reiterated its cautious outlook for European chemicals saying the industry group’s stock-market performance, which was more than 6 percent lower than that of the broader market, still didn’t represent a buying opportunity.

Tecan slid 4 percent to 95 francs. The company forecast moderate sales growth in local currency terms in 2013, after previously predicting “mid-single-digit percentage” growth.

Geberit AG, the maker of toilets and bathroom-piping systems, lost 2.3 percent to 234 francs. A gauge of European construction companies posted the second-worst performance of the 19 industry groups in the Stoxx Europe 600 Index. Sika AG, the maker of construction chemicals, slid 1.2 percent to 2,580 francs.

The volume of shares changing hands in SMI-listed companies was 13 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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