Swiss Stocks Little Changed as ABB Rallies, Nestle Falls
Swiss stocks closed little changed, paring losses in the final hour of trading, as ABB Ltd. and Actelion Ltd. climbed after reporting earnings while Nestle SA reported the slowest sales growth in three years.
ABB rallied to a 17-month high as the world’s biggest maker of power transformers posted profit that topped analysts’ projections. Actelion, the maker of the Tracleer lung drug, rose 2 percent after proposing a larger-than-expected dividend. Clariant AG advanced to the highest price since July 2011 as the chemical maker’s earnings also exceeded estimates. Nestle, the largest food company, slid the most since April.
The Swiss Market Index slipped less than 0.1 percent to 7,482.2 at the close in Zurich. The gauge has still soared 9.7 percent this year as Transocean Ltd., the world’s largest offshore driller, and Credit Suisse Group AG, Switzerland’s second-biggest bank, surged more than 20 percent. The broader Swiss Performance Index rose less than 0.1 percent today.
“We’ve seen a big rally since the beginning of the year and we are now at levels that are very sensitive, even to slightly negative news,” said Alessandro Fezzi, senior market analyst at LGT Bank Schweiz AG in Zurich. “Underlying sentiment is still positive, and today’s company earnings, aside from Nestle, have been very good.”
The volume of shares changing hands in SMI-listed companies was 33 percent greater than the average of the last 30 days, data compiled by Bloomberg showed.
The SMI earlier slid as much as 0.6 percent as a report showed the euro-area recession deepened more than economists forecast. Gross domestic product fell 0.6 percent in the fourth quarter from the previous three months, the European Union’s statistics office said. That’s the most since the first quarter of 2009 and compares with the median forecast of economists in a Bloomberg survey for a 0.4 percent contraction.
Japan unexpectedly shrank last quarter as falling exports and investment outweighed improved consumption. GDP dropped an annualized 0.4 percent, compared with the median forecast of economists surveyed by Bloomberg for 0.4 percent growth.
Swiss stocks pared losses as Warren Buffett’s Berkshire Hathaway Inc. and Jorge Paulo Lemann’s 3G Capital agreed to buy HJ Heinz Co. for about $23 billion and a report showed fewer Americans than projected filed applications for unemployment benefits last week.
ABB rallied 5.6 percent to 20.81 francs, the highest price since July 2011. Fourth-quarter net income declined 27 percent from a year earlier to $604 million, the Zurich-based company said. The average estimate by analysts in a survey by Bloomberg was for $570 million. Sales increased 4 percent to $11 billion, in line with estimates.
Actelion climbed 93 centimes to 46.41 francs after saying it will increase the dividend by 25 percent to 1 franc a share. Core earnings rose 12 percent last year to 537 million francs ($582 million), or 3.69 francs a share. Analysts had predicted 3.70 francs, according to the average of seven estimates compiled by Bloomberg.
Clariant added 4.9 percent to 14.06 francs. Full-year earnings before interest, taxes, depreciation and amortization from continuing operations amounted to 802 million francs. Analysts estimated earnings of 744 million francs, according to data compiled by Bloomberg.
“Underlying profitability is even stronger than expected,” Patrick Rafaisz, an analyst at Vontobel Holding AG, wrote in a note to clients today. “Hence, despite the short term uncertainty regarding economic prospects, we believe that the transformational changes of the group will continue and help dive well above industry-average EPS growth.”
Panalpina Welttransport Holding AG climbed 5.7 percent to 98 francs, the biggest gain since May, as Berenberg Bank AG raised the freight forwarder’s shares to buy from sell, citing the “prospects for the container-shipping industry.”
Nestle, which makes up 22 percent of the SMI by weight, declined 2.3 percent to 63 francs for the biggest drag on the index. Annual revenue advanced 5.9 percent excluding acquisitions, disposals and currency shifts. That was less than the 6 percent average estimate of 11 analysts surveyed by Bloomberg.
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