Stocks in Switzerland dropped for a third day, with the Swiss Market Index at a two-week low, as the European Commission lowered its forecast for euro-area economic growth and as Credit Suisse Group AG fell.
Credit Suisse declined after Bank of America Corp. said the bank might have to close its rates business if asked to raise its leverage ratio. Advanced Digital Broadcast Holdings SA tumbled 12 percent. Weatherford International Ltd. gained 3 percent after reporting better-than-forecast earnings.
The SMI slipped 0.4 percent to 8,149.31 at the close of trading in Zurich. The gauge rallied 2.6 percent in October as U.S. lawmakers reached a deal to avoid sovereign default and end a partial government shutdown. The broader Swiss Performance Index also slid 0.4 percent today.
“It’s a rather difficult day for stock markets,” said Reto Huenerwadel, a senior economist at UBS AG in Zurich. “The slight downward revision for the European growth outlook and the general cautious tone of the report certainly aren’t helping. The current price movements on the markets can be viewed as a consolidation before the release of major economic news out of Europe and the U.S. later in the week.”
The European Commission said gross domestic product in the 17-nation euro-area will rise by 1.1 percent in 2014, slower than the 1.2 percent it forecast in May. In the U.S., data this week will show GDP growth, consumer spending and hiring slowed in the world’s largest economy, according to estimates in Bloomberg surveys.
The Brussels-based commission said the euro-area’s unemployment rate, which is at its highest rate since the euro was introduced, will be 12.2 percent in 2014, higher than the 12.1 percent predicted six months ago. Annual inflation will be 1.5 percent in 2014, slowing to 1.4 percent in 2015, the commission said, adding pressure on the European Central Bank to cut interest rates further from record-low levels.
The volume of shares changing hands in companies listed on the SMI was 75 percent greater than the average of the past 30 days, data compiled by Bloomberg show.
Credit Suisse slipped 0.9 percent to 25.98 Swiss francs, paring an earlier loss of as much as 3.2 percent. Switzerland’s second-largest lender might have to close its rates business if the regulator raises the leverage ratio required of banks to 6 percent, Bank of America said. Credit Suisse slumped 6.7 percent yesterday after Schweiz am Sonntag cited Swiss Finance Minister Eveline Widmer-Schlumpf as saying the capital-adequacy ratio of banks is too low and the government should consider raising it.
Julius Baer Group Ltd. lost 2 percent to 42.16 francs.
Advanced Digital Broadcast tumbled 12 percent to 15.20 francs, its biggest plunge since August 2011. The company was cut to neutral from buy at Natixis SA.
Weatherford gained 3 percent to 15.30 francs. Third-quarter adjusted earnings per share amounted to 23 cents, beating the 21 cents analysts had projected. The company also said it expects greater international growth in 2014 compared to 2013.
Nationale Suisse jumped 4.2 percent to 50 francs, its highest price in more than six years. The stock yesterday rallied the most since 2008 after Mobiliar boosted its stake in the Swiss insurer, increasing the probability of a takeover.