Swiss Stocks Surge to Four-Year High on U.S. Budget Deal
Swiss stocks rose to their highest level in more than four years on their first trading day after U.S. lawmakers passed a budget that avoided most scheduled tax increases threatening a recovery in the world’s largest economy.
Transocean Ltd. climbed 11 percent after a person familiar with the situation said the company will settle the 2010 oil spill dispute with U.S. regulators for $1.5 billion. Schmolz & Bickenbach AG soared 8.4 percent after Handelsblatt reported the company may be a takeover target. UBS AG (UBSN) and Credit Suisse Group AG (CSGN), Switzerland’s largest lenders, each rose at least 4 percent.
The benchmark Swiss Market Index (SMI) added 2.9 percent to 7.020.46 at the close in Zurich, its highest level since September 2008. The gauge gained 15 percent in 2012, its biggest annual rally in three years, as the European Central Bank announced an unlimited bond-buying plan and the Federal Reserve expanded asset purchases. The broader Swiss Performance Index also advanced 2.9 percent today.
“The deal wasn’t perfect but at least we avoided the fiscal cliff, so for the moment the market is happy,” Peter Braendle, who helps manage about $60 billion at Swisscanto Asset Management in Zurich, said in an interview. “Swiss stocks are catching up with what Europe did yesterday, but I do wonder what will happen in two months’ time when the discussions start again.”
All 20 SMI members gained, as Novartis AG, Roche Holding AG and Nestle SA contributed the most to the Stoxx Europe 600 Index’s advance. The number of shares changing hands in SMI companies today was 47 percent higher than the average of the past 30 days, according to data compiled by Bloomberg.
European stocks rallied yesterday to their highest since February 2011 after the U.S. House of Representatives passed budget legislation, breaking an impasse over how to prevent more than $600 billion in tax increases and spending cuts from coming into force. President Barack Obama signed the bill into law.
Swiss manufacturing output contracted less than economists forecast in December. The procure.ch Purchasing Managers’ Index advanced to 49.5 from 48.5 in November, when adjusted for seasonal swings, Credit Suisse said. A reading below 50 indicates contraction. Economists forecast a decline to 48.4, the median of 10 estimates in a Bloomberg News survey showed.
Transocean climbed 11 percent to 44.62 francs. The world’s largest offshore rig contractor will settle all federal claims over the Deepwater Horizon explosion for $1.5 billion, according to a person familiar with the situation. The agreement may be announced today, said the person, who declined to be identified because the matter isn’t public.
Schmolz & Bickenbach soared 8.4 percent to 3.10 Swiss francs. German newspaper Handelsblatt reported yesterday that suitors such as Apollo Group Inc. or Triton Beteiligungsberatung GmbH may buy the maker of steel for the car industry for as much as 500 million euros ($657.8 million).
UBS rose 4.1 percent to 14.85 francs, while Credit Suisse jumped 5.4 percent to 23.46 francs, for the biggest gains on a gauge of European banks.
Swatch Group AG, which gets about half its revenue from Asia (UHR), rose 6.4 percent to 490.5 francs as Hong Kong’s government said sales of goods including jewelry and watches jumped 13.7 percent in November from a year earlier after falling the previous month. Cie. Financiere Richemont SA (CFR), the world’s second-largest luxury-goods company, added 5.7 percent to 75.5 francs.
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