Swiss Stocks Rise on Signs U.S. Lawmakers May Reach Deal
Swiss stocks advanced the most in a month as U.S. lawmakers indicated their willingness to discuss a short-term deal to avoid a debt default.
UBS AG (UBSN) and Credit Suisse Group AG (CSGN) rose more than 2 percent, following European banks higher. Syngenta AG (SYNN) added 1.6 percent as Berenberg Bank said it expects the chemical maker to post strong second-half results. Givaudan SA (GIVN) fell 2.6 percent after reporting its first sales decline in at least six quarters.
The Swiss Market Index (SMI) gained 1.2 percent to 7,851.08 at the close in Zurich, the biggest increase since Sept. 10. The benchmark gauge has still slipped 1.2 percent this week as U.S. lawmakers wrangled over raising the debt ceiling and a federal budget required to reopen the partially shut government. The broader Swiss Performance Index also added 1.2 percent today.
“It looks like at some point there will be an agreement between the Democrats and the Republicans,” Karim Bertoni, a Geneva-based European equities analyst at De Pury Pictet Turrettini & Co., which manages about $3.3 billion, said by phone. “They are already showing signs that they can talk, which is an improvement. It shows that there is a good mindset on both sides to find a solution.”
The volume of shares changing hands in SMI-listed companies was 9 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.
House Republican leaders are presenting their members with a proposal to raise the borrowing limit for six weeks without preconditions attached, according to a congressional aide familiar with the matter. A vote is possible tomorrow or Friday, said Representative Vern Buchanan of Florida. The Treasury has said it will exhaust measures to avoid breaching the limit on Oct. 17.
President Barack Obama has said he will accept a near-term increase and an agreement to end the government shutdown that began on Oct. 1 and then enter broader fiscal negotiations with Republicans. Obama will meet with 18 House Republican leaders and committee chairmen at 4:35 p.m. in Washington today.
The Swiss stock exchange said today it will allow short selling on a conditional basis. Investors can short Swiss securities starting from Nov. 11 if the selling party is able to deliver the shares on time, the SIX Swiss Exchange Ltd. said in a statement.
UBS, Switzerland’s biggest bank, climbed 2.9 percent to 18.52 Swiss francs and Credit Suisse, the second-largest, advanced 2.3 percent to 28.26 francs. A gauge of European lenders advanced 2.5 percent today.
Syngenta gained 1.6 percent to 358 francs after Berenberg forecast a “very strong” second half for the world’s biggest maker of crop chemicals, citing Latin American sales and a reversal in cost increases next year. The brokerage also said a decline in corn and soybean prices will not affect Syngenta’s business in 2014.
Panalpina Welttransport Holding AG (PWTN) rallied 3.4 percent to 132.50 francs after Bank Vontobel raised its recommendation on the shipping company to buy from hold, citing confidence in its management team. Vontobel boosted its 12-month share-price estimate to 160 francs, the highest among brokerages tracked by Bloomberg.
Givaudan dropped 2.6 percent to 1,212 francs. The world’s largest maker of flavorings said third-quarter sales fell 1.1 percent to 1.1 billion francs ($1.2 billion) as emerging-market currencies from Brazil to India weakened against the franc.
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