Swiss Stocks Extend Five-Year High as Swatch GainsTom Stoukas
Swiss stocks rose for a second day, extending the Swiss Market Index’s highest level in more than five years, as the franc weakened and Bank of England Governor Mervyn King said a U.K. economic recovery is in sight.
Swatch Group AG led gains in the benchmark SMI, advancing 2.9 percent. Roche Holding AG extended an all-time high after winning U.S. approval to sell a gene-mutation test. Tornos Holding AG surged the most in nine years after selling shares.
The SMI increased 1.5 percent to 8,313.08 at the close of trading in Zurich, its highest level since January 2008, even as a report showed the euro region contracted more than forecast in the first quarter. The gauge has rallied 22 percent so far in 2013, the best start to a year since 1997. The broader Swiss Performance Index advanced 1.4 percent today.
“The lower currency helps,” said John Plassard, who helps oversee $28 billion as vice president at Mirabaud Securities LLP in Geneva. “At the point that the euro zone is going the wrong way, Switzerland is still the safe haven. Liquidity is still driving the market.”
The Swiss franc declined to a nine-month low against the U.S. currency, dropping as much as 0.8 percent to 97.48 centimes per dollar. A weaker franc boosts the earnings prospects of Swiss exporters.
Bank of England officials predicted that U.K. economic growth may accelerate to 0.5 percent this quarter from 0.3 percent in the first three months of the year. The Monetary Policy Committee left its bond-buying program unchanged at 375 billion pounds ($571 billion) at its meeting last week.
The SMI climbed even as Swiss investor confidence fell in May. An index of investor and analyst expectations, which aims to predict economic developments six months in advance, decreased to 2.2 from 20 in April, the ZEW Center for European Economic Research in Mannheim, Germany, and Zurich-based Credit Suisse Group AG said.
Gross domestic product in the 17-nation euro zone fell 0.2 percent after a 0.6 percent decline in the previous three months, the European Union’s statistics office in Luxembourg said today. The median of 39 estimates in a Bloomberg News survey was for a 0.1 percent contraction.
Swatch the largest maker of Swiss timepieces, gained 2.9 percent to 580 francs, rising for a third day to the highest price since at least 1993.
Cie. Financiere Richemont SA, the owner of the Cartier brand, rallied 2.8 percent to 82.55 francs.
Roche added 1.6 percent to 247.80 francs, the highest since at least 1989. The world’s biggest maker of cancer drugs won U.S. approval to sell a gene-mutation test that can help doctors pinpoint patients’ likelihood to respond to a popular treatment for lung cancer.
Basilea Pharmaceutica AG surged 10 percent to 68.40 francs. Astellas Pharma Inc. may be interested in buying the drugmaker, Finanz & Wirtschaft reported today, without saying where it got the information. Peer Nils Schroeder, a spokesman for Basilea, declined to comment.
UBS AG and Credit Suisse Group AG, Switzerland’s two largest lenders, added 2.4 percent to 17.65 francs and 1.5 percent to 28.88 francs. A gauge of banks was the second-best performer among 19 industries in the Stoxx Europe 600 Index.
Tornos surged 46 percent to 5.83 francs, the largest gain since August 2003. The Swiss maker of machines for precision components announced plans to sell shares for 75 percent more than yesterday’s closing price.