Swiss stocks rose for a fourth day, extending their highest level since May, amid speculation the Federal Reserve will maintain the pace of its bond buying after U.S. employers added fewer workers than predicted.
Novartis AG, which makes up 19 percent of the Swiss Market Index, gained 2 percent after increasing its sales target for the year. Transocean Ltd. rose the most in more than nine months after Standard & Poor’s said the dual-listed offshore-drilling contractor will join its benchmark U.S. equities index.
The SMI added 1.1 percent to 8,214.76 at the close of trading in Zurich. The equity benchmark has gained 2.4 percent so far in October as U.S. lawmakers reached an agreement to avoid a sovereign default. The gauge has surged 20 percent in 2013 as central banks around the world pledged to leave interest rates low for a prolonged period. The broader Swiss Performance Index increased 1 percent today.
“After the effects of the government shutdown, the Fed won’t want to place an additional burden on the U.S. economy,” Takis Spiliopoulos, head of research at Bank Vontobel AG, said by phone from Zurich. “Any stimulus cut will probably be pushed out into March next year. Novartis guiding slightly upwards is helping the market today, though it’s for a very specific reason and the earnings season has been pretty even.”
In the U.S., a report showed that payrolls rose by 148,000 in September, missing the 180,000 median forecast of economists surveyed by Bloomberg News. Employers added a revised 193,000 workers in August. The Labor Department had planned to release the data on Oct. 4, only for the 16-day partial government shutdown to delay publication until today.
The unemployment rate fell to 7.2 percent last month. Economists had projected the rate would remain at 7.3 percent. The Fed has pledged to keep its benchmark interest rate near zero as long as unemployment exceeds 6.5 percent and the outlook for inflation doesn’t rise above 2.5 percent.
The Federal Open Market Committee starts its next two-day meeting on Oct. 29. The Fed will delay the first reduction in its monthly bond purchases until March because the closure of federal agencies slowed quarterly growth and interrupted the gathering of data, economists said in a Bloomberg News survey.
Novartis rose 2 percent to 69.25 Swiss francs as the drugmaker said sales will probably increase at a low- to mid-single-digit percentage rate this year. It had forecast low-single-digit growth. Core operating income will either match or exceed last year’s level. The company had said earnings on that measure would slip.
Transocean climbed 4.8 percent to 43.96 francs. The company will replace Dell Inc. in the S&P 500 Index after the close of trading on Oct. 28, S&P said in a statement late yesterday. Money managers have benchmarked more than $5.14 trillion to the index, according to the S&P website.
AMS AG surged 14 percent to 96.35 francs, its biggest rally in 21 months. The Austrian maker of semiconductors predicted sales will increase to as much as 114 million euros ($157 million) in the fourth quarter from last year’s 97.5 million euros, according to a statement late yesterday.