Swiss Stocks Slip for Second Day; Swatch, Richemont Fall
Swiss stocks slipped for a second day as investors awaited confirmation that Germany will ratify the euro area’s permanent bailout fund and a policy announcement from the U.S. Federal Reserve.
The Swiss Market Index (SMI) dropped 0.1 percent to 6,503.3 at the close in Zurich. The gauge advanced on Sept. 7 to its highest close since May 31, 2011 as the European Central Bank set up a bond-purchase program to lower borrowing costs in the euro area and investors speculated that the U.S. Federal Open Market Committee will opt to stimulate growth. The broader Swiss Performance Index retreated less than 0.1 percent today.
“People are waiting on the decisions,” said Markus Neuburger, head of sales at Donner & Reuschel AG in Munich. “There is a high expectation on the FOMC meeting and on the German court ruling. But I don’t think there is much upside in those decisions.”
Germany’s Federal Constitutional Court will rule tomorrow whether the country may ratify the European Stability Mechanism, the currency area’s permanent rescue facility.
The FOMC starts a two-day meeting tomorrow. The Dollar Index slid to a four-month low today amid speculation the Fed will buy bonds in a third round of quantitative easing.
Mariano Rajoy, Spain’s prime minister, said late yesterday that he won’t allow the European Union or the ECB to stipulate how the Spanish government narrows its budget deficit. The central bank said on Sept. 6 that countries must abide by strict conditions if they want the ECB to buy their bonds.
Swatch, the biggest maker of Swiss watches, declined 2.2 percent to 405 Swiss francs. Richemont, the maker of Cartier watches, plunged 5.1 percent to 60.85 francs, its largest drop since June 1.
Burberry, the U.K.’s largest luxury-goods maker, said full- year profit will disappoint after sales growth slowed in the 10 weeks ended Sept. 8. “The external environment is becoming more challenging,” Burberry’s Chief Executive Officer, Angela Ahrendts, said in a statement.
Actelion Ltd. (ATLN) rose 0.7 percent to 47.07 francs after the maker of the Tracleer blood-pressure drug said it will cut costs by removing 135 jobs globally. The company reiterated its forecast for a mid-single-digit percentage increase in earnings this year.
To contact the reporter on this story: Alexis Xydias in London at firstname.lastname@example.org
To contact the editor responsible for this story: Andrew Rummer at email@example.com