Swiss Stocks Rise Before ECB Rate Decision; Roche Climbs
Stocks in Switzerland rebounded, with the benchmark Swiss Market Index rising for the first time in three days, as investors awaited the European Central Bank’s interest-rate decision.
Roche (ROG) Holding AG, the world’s biggest maker of cancer drugs, climbed 1 percent as Bank of America Corp. added the stock to its list of most preferred health-care shares. Swatch Group AG and Cie. Financiere Richemont SA advanced at least 1.5 percent. OC Oerlikon (OERL) Corp. increased 1.8 percent after it completed the sale of its natural-fibers business. Barry Callebaut (BARN) AG gained 1.7 percent.
The SMI (SMI) climbed 0.8 percent to 7,735.85 at 9:52 a.m. in Zurich. The equity benchmark has fallen 8 percent since Federal Reserve Chairman Ben S. Bernanke said on May 22 that the central bank may reduce its bond buying if the U.S. economy recovers in line with its forecasts. The broader Swiss Performance Index also added 0.7 percent today.
Swiss stocks fell yesterday after Standard & Poor’s downgraded the country’s second-largest bank, while a resignation from Portugal’s government revived concern about its ability to pursue austerity measures.
The volume of shares changing hands in SMI-listed companies was 38 percent lower than the 30-day average today, according to data compiled by Bloomberg.
The ECB will leave its benchmark interest rate unchanged at a record low of 0.5 percent today, according to 61 of 62 forecasts in a Bloomberg survey of economists. The central bank announces the decision at 1:45 p.m. in Frankfurt and President Mario Draghi holds a press conference 45 minutes later.
In Portugal, Paulo Portas, the minister whose resignation this week threatened to bring down the government, will meet with Prime Minister Pedro Passos Coelho to try to patch up a rift that triggered a surge in bond yields.
In Egypt, the army removed President Mohamed Mursi from power and suspended the constitution. West Texas Intermediate crude rose for a fourth day amid concern the unrest in the Arab world’s most populous state will disrupt the supply of oil through the Suez Canal.
Roche gained 1 percent to 237.40 Swiss francs, contributing the most to the SMI’s advance, as Bank of America added the stock to its most preferred health-care shares, saying the current price represents a buying opportunity.
Swatch, the biggest maker of Swiss watches, increased 1.5 percent to 528.50 francs. Richemont, the owner of the Cartier brand, added 1.6 percent to 84.35 francs.
Oerlikon, the maker of textile machinery, added 1.8 percent to 11.50 francs after it said it will get a 470 million-franc ($495 million) cash boost from the sale of its natural-fibers business to Jinsheng Group of China. The Jinsheng deal was announced in December.
“The divestment reduces overall cyclical exposure and thus risk, which we rate as positive,” Michael Foeth, an analyst at Vontobel Holding AG, wrote in a note to clients today.
Barry Callebaut advanced 1.7 percent to 898.50 francs, even as the world’s largest maker of bulk chocolate said nine-month revenue fell 0.5 percent to 3.54 billion francs amid lower average raw material prices. The company also confirmed its mid-term guidance for average volume growth of 6 percent to 8 percent through 2016.
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