Swiss stocks were little changed as data showing euro-area manufacturing expanded for a fifth month in November offset Federal Reserve minutes that signaled the U.S. may reduce the pace of stimulus in coming months.
Actelion Ltd. rose 1.8 percent, for the best performance on the benchmark index. Swatch Group AG slipped after a report from the Federation of the Swiss Watch Industry showed Swiss exports of timepieces to China dropped. Carlo Gavazzi Holding AG, a maker of electronic equipment, slid 3.2 percent. Swiss Re Ltd., the world’s second-largest reinsurer, fell 1.8 percent.
The Swiss Market Index retreated 0.2 percent to 8,268.69 at the close of trading in Zurich. The measure has still surged 21 percent this year, heading for the biggest annual rally since 2005, as central banks around the world pledged to leave interest rates low for a prolonged period. The Swiss Performance Index also dropped 0.2 percent today.
“We’re seeing investors taking a breather,” said Benno Galliker, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland. “The Fed comments from yesterday’s minutes came to no one’s surprise, and present a good excuse to take some profit and lay low. In Switzerland, pharmaceutical shares are providing the SMI with some support.”
Euro-area manufacturing expanded in November, as Germany continued to drive the 17-nation currency bloc’s gradual recovery from a record-long recession. A purchasing managers’ index rose to 51.5 from 51.3 in October, Markit Economics said. That’s in line with the median forecast in a Bloomberg News survey. A reading above 50 indicates expansion.
Fed officials signaled they may taper their $85 billion in monthly bond buying “in coming months” if the economy improves as anticipated.
Policy makers “generally expected that the data would prove consistent with the committee’s outlook for ongoing improvement in labor-market conditions and would thus warrant trimming the pace of purchases in coming months,” according to the record of the Federal Open Market Committee’s Oct. 29-30 gathering, released yesterday in Washington.
In China, a manufacturing gauge fell in November for the first time in four months. The preliminary 50.4 reading for the Purchasing Managers’ Index released by HSBC Holdings Plc and Markit compared with a 50.8 median estimate from analysts surveyed by Bloomberg. The final number for October was 50.9.
Actelion gained 1.8 percent to 75.55 francs, snapping a two-day drop. The biotechnology company could be “an intriguing potential target” for AstraZeneca Plc, Citigroup Inc. analyst Andrew Baum wrote in a note today. According to Baum, acquiring Actelion could give a 12 percent boost to AstraZeneca’s earnings before interest and taxes without jeopardizing its dividends.
A gauge of pharmaceutical shares was among the best performers of the 19 industry groups on the Stoxx Europe 600 Index. Novartis AG added 0.6 percent to 72.35 francs.
Swatch, the biggest maker of Swiss timepieces, lost 0.8 percent to 586 Swiss francs. Swiss watch exports to China fell 8.9 percent in October from a year earlier, the Federation of the Swiss Watch Industry said. About 37 percent of Swatch’s sales came from China in 2012, according to data compiled by Bloomberg.
Cie. Financiere Richemont SA, the owner of the Cartier brand, retreated 0.8 percent to 91.75 francs.
Carlo Gavazzi slid 3.2 percent to 211.20 francs. First-half net income declined 25 percent to 4.3 million francs ($4.7 million) from a year earlier, the company said in a statement.
Swiss Re fell 1.8 percent to 80.55 francs after agreeing to buy just over half of New China Life Insurance Co. shares sold by Zurich Insurance Group AG. Swiss Re said late yesterday in a statement that it will buy a 4.9 percent stake in New China Life for $493 million.
“It’s generally to be welcomed that Swiss Re strengthens its position in the global growth markets,” Georg Marti, an analyst at Zuercher Kantonalbank AG in Zurich, wrote in a note to clients today. “With that, Swiss Re spends billions for stake purchases within a short period of time,” reducing the likelihood that it will pay another high special dividend for 2013, he said.
Transocean Ltd. fell 3.3 percent to 47.94 francs, for the biggest decline on the SMI Index. The world’s largest offshore rig contractor said it’s considering all options for the divestment of non-core assets by 2018.