Stocks in Switzerland Advance as Richemont, Novartis GainCorinne Gretler
Swiss stocks rose, posting their second-biggest gain this year, as Cie. Financiere Richemont SA reported profit that beat forecasts and Novartis AG said its lung-disease drug met its objective in a study.
Richemont, the owner of the Cartier brand, rallied the most since 2008 as full-year net income jumped about 30 percent. Novartis made the largest contribution to the increase in the Swiss Market Index. AMS AG slumped the most in four years.
The SMI rose 2.5 percent to 7,802.48 at the close of trading in Zurich, the biggest advance since Jan. 3. The benchmark gauge dropped 1.8 percent last week as economic reports from the U.S., China and Germany missed forecasts. The measure has still rallied 14 percent so far this year. The broader Swiss Performance Index climbed 2.4 percent today.
“Positive company news is supporting the Swiss market today, with the heavyweights climbing,” said Markus Wallner, an equity strategist at Commerzbank AG in Frankfurt. “The Swiss luxury shares are advancing on stronger Richemont profit and slightly better Swiss watch export numbers.”
Euro-area services and manufacturing output contracted for a 15th month in April, data showed today. A composite index based on a survey of purchasing managers in both industries held at 46.5, London-based Markit Economics said. That’s in line with the median of 26 economists’ forecasts in a Bloomberg News survey. A reading below 50 indicates contraction.
“PMI figures in Europe weren’t great,’ Wallner said. ‘‘Market participants are betting that the European Central Bank will lower interest rates.”
Richemont advanced 8.3 percent to 73.80 Swiss francs, for the biggest gain on the SMI. A close at this price would be the largest increase for the stock since 2008. Net income growth in the year through March beat analysts’ average estimate of a 25 percent increase. Operating profit rose about 18 percent, matching projections.
Swatch Group AG, the biggest maker of Swiss timepieces, climbed 3.2 percent to 528 francs. Swiss watch exports rose 0.6 percent in March after a 2.5 percent drop the previous month.
Novartis increased 2.5 percent to 69.25 francs. The drugmaker said a study showed its once-daily QVA149 drug improved lung function and quality of life in patients with chronic obstructive pulmonary disease.
“These data confirm our bullish view on this new product, which is set to be one of the drivers for the company,” Odile Rundquist, an analyst at Helvea SA, wrote in a note to clients.
Roche Holding AG gained 2.2 percent to 230 francs after announcing a plan to revamp its life-sciences business. The world’s largest maker of cancer drugs said it will dissolve its Applied Science laboratory supply operation because of cuts in research funding and price pressure, and end an alliance with International Business Machines Corp.
Credit Suisse added 0.8 percent to 26.45 francs. Switzerland’s second-biggest bank will report results tomorrow.
Georg Fischer AG, the maker of auto parts and piping systems, rose 3.9 percent to 395.50 francs, the biggest advance since Feb. 27. The company won an order for truck parts worth more than 380 million francs ($405 million).
AMS slumped 11 percent to 81.40 francs. Chief Executive Officer John Heugle said he will leave at the end of his current contract.
Andreas Mueller, an analyst at Zuercher Kantonalbank AG, downgraded the shares to market weight from overweight, meaning investors should no longer buy them. The analyst called the company’s results guidance ambitious.
The volume of shares changing hands in SMI-listed companies was 31 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.