Swiss Stocks Advance as U.S. Lawmakers Begin Debt Talks
Swiss stocks rose for a second day, trimming a weekly decline, as U.S. President Barack Obama met House Republican leaders, fueling optimism they will agree on raising the debt limit to avoid a default.
Roche Holding AG climbed 0.9 percent after its Genentech unit said the U.S. accepted an application for the use of one of its drugs to treat a skin condition. Cie. Financiere Richemont SA gained 1.2 percent after saying its Net-a-Porter unit isn’t for sale. Geberit AG declined 3.5 percent after Goldman Sachs Group AG downgraded the shares.
The Swiss Market Index (SMI) added 0.6 percent to 7,894.3 at 10:26 a.m. in Zurich, heading for the biggest two-day increase since Aug. 5. The benchmark gauge has still slipped 0.6 percent this week as U.S. lawmakers wrangled over raising the borrowing limit and passing a budget required to lift the partial shutdown of the government. The broader Swiss Performance Index increased 0.5 percent today.
We’re seeing “stronger markets on political hopes,” Guy Foster, head of portfolio strategy at Brewin Dolphin Ltd., which manages $44 billion, wrote. “Perceived political risks are falling. The political situation in the U.S. remains fluid, with a short-term debt ceiling apparently being offered.”
Obama met House Republican leaders at the White House yesterday after House Speaker John Boehner proposed a short-term increase to the country’s $16.7 trillion borrowing authority that would extend the deadline for a solution to Nov. 22 from Oct. 17.
The U.S. president would probably sign a debt-limit increase without policy conditions, according to a White House press secretary. A fiscal impasse between Democrats and Republicans has led to a partial government shutdown since Oct. 1 and raised concern they may not agree to a debt-ceiling increase before the Treasury runs out of extraordinary measures to avoid breaching the limit on Oct. 17.
Roche, the world’s biggest maker of cancer drugs, added 0.9 percent to 236.80 Swiss francs. The U.S. Food and Drug Administration accepted an application for the use of the Xolair drug in patients with chronic idiopathic urticaria, a skin condition, if their symptoms continue even after using antihistamines, Genentech said in a statement.
Richemont (CFR) gained 1.2 percent to 91.75 francs after the world’s biggest jewelry maker said it is not selling its online clothes retailer Net-a-Porter. Yoox SpA held talks with Richemont about a merger with Net-a-Porter, though discussions have stalled, Italy’s Il Sole 24 Ore reported this week, without saying where it got the information.
“Richemont has a long-standing policy of not commenting on market rumors,” the company said after markets closed yesterday. “Exceptionally in this case, Richemont wishes to make it clear that The Net-A-Porter Group is not for sale.”
Swatch Group AG (UHR), the biggest maker of Swiss watches, advanced 1.4 percent to 586 francs.
Geberit fell 3.5 percent to 232.40 francs after Goldman Sachs downgraded the maker of toilets and bathroom piping to sell from neutral.
The volume of shares changing hands in SMI-listed companies was 8.8 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.
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