Swiss stocks rose to an almost six-month high as investors speculated central banks won’t rush to withdraw support to the economic recovery.
Sonova Holding AG rallied the most in a year after posting first-half revenue that beat analysts’ estimates and raising its financial targets. Swatch Group AG and Nestle SA also advanced.
The Swiss Market Index rose 0.3 percent to 8,351.38 at the close in Zurich, its highest level since May 22. The gauge advanced 1.1 percent last week as Federal Reserve chairman nominee Janet Yellen said she is committed to promoting a strong U.S. economic recovery and will ensure monetary stimulus isn’t removed too soon. The broader Swiss Performance Index also climbed 0.3 percent today.
“We are still positive on growth,” Joost van Leenders, who helps oversee about $645 billion as a strategist at BNP Paribas from Amsterdam, said by phone. “Europe is relatively attractive but we need to see more earnings growth to move further out. Equities will gain next year but it really has to come from earnings.”
Economists in a Bloomberg survey estimate that policy makers in the U.S. will wait until a March 18-19 meeting to begin tapering bond purchases to $70 billion a month from $85 billion. The Fed’s decision to maintain the pace of stimulus has helped the MSCI World Index jump 21 percent this year and the SMI 23 percent.
Sonova rose 5.4 percent to 124.70 Swiss francs, its biggest jump since November 2012 and highest price since March 2011. The hearing-aid maker said sales will probably rise 8 percent to 10 percent in local currencies in the 12 months through March, compared with the earlier forecast of a 6 percent to 8 percent gain.
The company also said earnings before interest, taxes and amortization will probably advance 11 percent to 14 percent in local currencies, compared with 9 percent to 13 percent predicted previously.
Nestle, the world’s largest food company, added 0.6 percent to 67.30 francs. Coffee farmers in Vietnam, the biggest producer of robusta beans used in instant drinks, plan to maintain production even after costs climbed and prices plunged to the lowest level in three years.
Swatch climbed 2.5 percent to 597.50 francs. China’s stocks rose, with the benchmark index for mainland companies in Hong Kong surging the most since December 2011, after the government pledged to ease the one-child policy and boost private investment as part of the biggest package of economic reforms since the 1990s.
Swatch and Cie. Financiere Richemont SA, Switzerland’s largest listed watchmakers, make about half of sales in Asia, according to data compiled by Bloomberg. Richemont shares rose 0.5 percent to 93.15 francs.
The SMI is trading at 16.3 times the projected earnings of its constituents, higher than the five-year average of 13.19 times.