Swiss stocks declined as UBS AG and Credit Suisse Group AG slid, outweighing a report that showed Germany’s manufacturing industries expanded at a faster-than-expected pace last month.
UBS and Credit Suisse each retreated more than 5 percent as Swiss Finance Minister Eveline Widmer-Schlumpf said lenders may have to pull out of investment banking if their leverage ratios increase. Holcim Ltd., the world’s biggest cement maker, advanced 1.9 percent, following a gauge of European construction companies higher.
The Swiss Market Index lost 0.4 percent to 8,185.69 at the close of trading in Zurich after earlier climbing as much as 0.5 percent. More than two companies rose for every one that fell. The gauge rallied 2.6 percent in October, completing its biggest two-month gain since the beginning of the year, as U.S. lawmakers agreed on a new budget to avoid a sovereign default and end a partial government shutdown. The broader Swiss Performance Index also slipped 0.4 percent today.
“I would expect that the market will trade sideways after the respectable increase since mid-October,” said Konstantin Giantiroglou, head of investment advisory at Neue Aargauer Bank in Brugg, Switzerland. “The economic data that are coming in are positive. Sentiment is good, and the only stocks really pushing the SMI lower today are UBS and Credit Suisse.”
The volume of shares changing hands in companies listed on the SMI was more than double the average of the past 30 days, data compiled by Bloomberg show.
In Germany, a measure of manufacturing from Markit Economics for Europe’s largest economy rose to 51.7 in October from 51.1 in September. That exceeded the median economist estimate of 51.5 in a Bloomberg survey. Readings greater than 50 mean that activity increased.
UBS retreated 5.3 percent to 16.54 Swiss francs, its lowest price in almost four months. Credit Suisse slid 6.7 percent to 26.21 francs, its biggest slump since June 2012. Switzerland’s finance minister told Schweiz am Sonntag that banks may have to choose between continuing their investment-banking businesses and focusing more on asset management.
“We must consider whether the capital-adequacy base shouldn’t be strengthened further,” Widmer-Schlumpf told the newspaper. “Currently 6 percent to 10 percent are being discussed” as a leverage ratio, she said.
Swiss Finance Ministry spokesman Roland Meier said today that the government doesn’t plan to make any changes before 2015 when it publishes its review of banks that are too big to fail.
Holcim increased 1.9 percent to 68.40 francs. A gauge of construction-related equities posted the second-best performance of the 19 industry groups in the Stoxx Europe 600 Index.
Addex Therapeutics Ltd. gained 2.8 percent to 3.72 francs, the highest price in six weeks, after the biotechnology company said it will collaborate with America’s National Institute on Drug Abuse to evaluate two potential treatments for nicotine and cocaine addiction.
In the U.S., a Commerce Department report showed that orders placed with American factories rose 1.7 percent in September. That missed the 1.8 percent increase economists had forecast in a Bloomberg News survey.