Stocks in Switzerland Drop to Their Lowest in Six Weeks
Swiss stocks fell, with the Swiss Market Index dropping to its lowest level in six weeks, as a gauge of Chinese manufacturing slipped and concern grew that the Federal Reserve will reduce its debt purchases.
Roche Holding AG (ROG) slid the most in 18 months after a study showed that its Avastin drug failed to extend the lives of patients with a type of brain cancer. Addex Therapeutics Ltd. (ADXN) slumped 30 percent. SGS (SGSN) SA, the world’s biggest product inspector, advanced 1.1 percent.
The SMI (SMI) retreated 2.1 percent to 7,780.98 at the close of trading in Zurich, its lowest level since April 22. The gauge posted a 2.7 percent decline last week, its biggest since November. The benchmark measure still rose 0.5 percent last month, completing its longest streak of gains since 1997. The Swiss Performance Index lost 2 percent today.
“Just as we’ve seen in the U.S. on Friday and this morning in Asia, it’s especially the fear of an end of the loose monetary policy of the Fed that weighs on markets,” said Benno Galliker, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland. “This fear is present and will increase until we get the U.S. labor data on Friday. Investors are rather cautious at the moment. Most of them probably expect a continuation of the correction or a sideways market in the next few days.”
U.S. stocks dropped on May 31 as better-than-forecast data on business activity and consumer confidence intensified concern that the Fed will scale back stimulus. A Labor Department report on Friday may show that the world’s biggest economy created 167,000 jobs last month, beating the gain in April, according to the median forecast from 79 economists surveyed by Bloomberg.
The volume of shares changing hands in SMI-listed companies was 17 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.
HSBC Holdings Plc and Markit Economics said their Chinese manufacturing index, released today, fell to 49.2 in May from 50.4 in April. A reading below 50 means that activity contracted. The official index for the industry, released on June 1, rose to 50.8 from 50.6.
The final reading of a purchasing managers’ index for manufacturing in the 17-nation euro area climbed to 48.3 in May. That exceeded the median estimate of economists in a Bloomberg survey for a reading of 47.8.
In the U.S., the Institute for Supply Management’s factory index fell to 49 last month from 50.7 in April. That missed the median forecast of economists for a reading of 51.
Roche declined 3.7 percent to 230.30 Swiss francs, contributing the most to the SMI’s drop. The world’s biggest maker of cancer drugs presented the results of a study into Avastin’s effectiveness for people with glioblastoma at a meeting of the American Society of Clinical Oncology. A separate study showed the treatment helped prolong the lives of women with an aggressive form of cervical cancer.
Addex tumbled 30 percent to 4.50 francs. Chief Executive Officer Bharatt Chowrira will step down, with Chairman Andre Mueller taking over in the interim, the company said on May 31 after European markets closed. Addex added that it has reduced its staff to only two employees.
SGS climbed 1.1 percent to 2,185 francs. Exor SpA, a holding company owned by the Agnelli family, sold its stake in SGS to Groupe Bruxelles Lambert SA for 2 billion euros ($2.6 billion). Exor, which also holds the family’s shares in Fiat SpA (F), will use the proceeds from the sale of its 15 percent holding to pursue new investments, it said in a statement.
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