Swiss Stocks Advance; Novartis, Luxury Companies Rise
Swiss stocks rose, rebounding from last week’s decline, as investors waited for Alcoa Inc. to kick off the U.S. earnings season, and a report showed German industrial output rose more than forecast in February.
Novartis AG (NOVN) advanced the most in more than five weeks after Bank of America Corp. raised its recommendation for the stock. Cie. Financiere Richemont SA and Swatch Group AG (UHR) added at least 1.8 percent. Barry Callebaut (BARN) AG, the world’s largest maker of bulk chocolate, fell the most in 11 months after reporting first-half profit and revenue that missed analysts’ projections.
The SMI (SMI) rose 0.7 percent to 7,691.84 at the close in Zurich. The benchmark gauge slid 2.2 percent last week as data on U.S. jobs and services industries signalled the economic rebound in the world’s largest economy has slowed. The broader Swiss Performance Index gained 0.9 percent today.
“After the cold shower for investors on Friday with the U.S. employment numbers, investors will now focus on the publication of first-quarter results for Alcoa today,” said John Plassard, who helps oversee $28 billion as vice president at Mirabaud Securities LLP. “So far this year, we’ve seen consolidations being followed by good rebounds, so this week is crucial for equity markets as investors will seek confirmation of a rebound or gauge whether the market momentum is waning.”
The number of stocks changing hands in the Swiss gauge was 18 percent lower than the average of the past 30 days, according to data compiled by Bloomberg.
Alcoa Inc., the largest U.S. aluminum producer, unofficially kicks of the U.S. earnings-reporting season after the close of U.S. markets today. Profits at companies in the S&P 500 may contract 1.8 percent in the first quarter, the first drop since 2009, analysts’ estimates compiled by Bloomberg show.
German industrial production rose 0.5 percent from January, when it contracted 0.6 percent, the Economy Ministry in Berlin said today. Economists forecast a 0.3 percent gain, according to the median of 41 estimates in a Bloomberg News survey. From a year earlier, production dropped 1.8 percent when adjusted for working days.
Novartis gained 1.8 percent to 66.65 Swiss francs, contributing the most to the SMI’s advance, as Bank of America raised its recommendation on the shares to neutral from underperform. Graham Parry, an analyst at Bank of America, said the drugmaker will benefit from a re-rating of the sector.
Richemont, the owner of the Cartier brand, climbed 2.2 percent to 72.65 francs, while Swatch, the largest maker of Swiss watches, added 1.8 percent to 527 francs.
Barry Callebaut declined 3.3 percent to 881.50 francs after posting first-half net income from continuing operations of 116.4 million francs ($124.5 million), missing the average analyst estimate of 129.4 million francs. Revenue in the first half was 2.39 billion francs, compared with the 2.46 billion- franc analyst forecast.
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