Swiss Stocks Decline After Three-Day Rally for Benchmark
Swiss stocks declined, reversing a three-day rally, as investor concern over a decision this week from U.S. lawmakers on air strikes against Syria offset data showing Chinese exports rose more than expected.
SGS SA (SGSN) and Novartis AG (NOVN) posted the biggest declines in the Swiss Market Index. Orell Fuessli Holding AG plunged the most since 2008 after the printer of banknotes forecast “negative results” for 2013. Swiss Re Ltd. (SREN) climbed 1.6 percent as reinsurers rose after forecasting stable rates.
The SMI (SMI) lost 0.2 percent to 7,935.76 at the close in Zurich. The benchmark gauge gained 2.6 percent last week, posting the largest one-week gain since June 28. The broader Swiss Performance Index also retreated 0.2 percent today.
“The geopolitical problems and the selloff in emerging markets are clearly putting the breaks on risk assets,” Nicola Marinelli, who helps oversee $180 million as portfolio manager at Glendevon King Ltd. in London, said by telephone. “The apparent good news out of China is not enough because of Syria. There is the prospect of international relationships becoming more sour and it’s not clear what could happen to the equilibrium in the Middle East if there is an attack.”
U.S. President Barack Obama will try this week to persuade a skeptical Congress and a reluctant American public to support air strikes against Syria. He failed to win backing from foreign leaders at last week’s Group of 20 summit for military action in response to a chemical weapons attack that his administration says killed more than 1,400 people.
China’s August exports increased more than forecast. Overseas shipments rose 7.2 percent from a year earlier, the General Administration of Customs said in Beijing yesterday. That beat the 5.5 percent median estimate of analysts surveyed by Bloomberg News.
SGS, the world’s largest product-inspection company, lost 1.4 percent to 2,137 Swiss francs. Novartis retreated 1.1 percent to 70.35 francs. Nestle SA, the biggest food company, slipped 0.7 percent to 60.90 francs.
Orell declined 10 percent to 90 francs. The security-printing unit, which produces Switzerland’s banknotes, may have a loss of 8 million francs ($8.5 million) this year. The business will be “severely depressed” after a client made complaints on printing errors, Zurich-based Orell Fuessli said.
Swiss Re added 1.6 percent to 72.85 francs. Reinsurers are meeting brokers and their clients, primary insurers, in Monte Carlo to negotiate terms and conditions of next year’s property and casualty policies.
Swiss Re said it expects the price of natural-catastrophe reinsurance to stabilize in 2014 after a drop this year. Kurt Karl, chief economist of the world’s second-biggest reinsurer, said marine and airline premiums will rise between 4 percent and 5.5 percent per annum on average over the next 10 years.
Straumann Holding AG (STMN) climbed 4.7 percent to 177.50 francs. Sanford C. Bernstein & Co. raised the the world’s biggest maker of dental implants to outperform, the equivalent of buy, from market perform, which is similar to hold.
The brokerage said improvement in U.S. consumer confidence points to an increase in demand for dental implants and the company will benefit from growth in both sales and profit margins.
Lonza Group AG (LONN) gained 1.7 percent to 70.90 francs, a one-month high. The maker of drug ingredients and chemicals was upgraded to outperform from underperform by MainFirst Bank AG. Analysts led by Bernd Pomrehn said the company’s new management is implementing cost-cutting measures and a new strategy.
“These measures are substantially improving the earnings visibility,” Zurich-based Pomrehn wrote. “Therefore, we are confident that Lonza will achieve double-digit earnings growth in the coming years.”
Cytos Biotechnology AG (CYTN) advanced 4.1 percent to 4.06 for the biggest gain since Aug. 14. The drugmaker published a statement with data from a study on an asthma treatment.
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