Swiss Stocks Advance to Highest Level Since December 2007Sarah Jones
Swiss stocks climbed to their highest level since 2007 as Federal Reserve Chairman Ben S. Bernanke signaled that the central bank will continue its loose monetary policy to prevent the U.S. recovery from stalling.
Roche Holding AG advanced 3 percent after Citigroup Inc. recommended that investors buy the drugmaker. Schmolz & Bickenbach AG surged 14 percent after the steelmaker raised its outlook. Givaudan SA and Novartis AG rose more than 1.5 percent.
The Swiss Market Index increased 1.1 percent to 8,407.61 at the close in Zurich, its highest level since December 2007. The gauge earlier fell as much as 0.3 percent. The broader Swiss Performance Index rose 1 percent today.
“Markets rallied after Bernanke confirmed a bias to remain fully engaged in supportive measures and avoid premature tightening,” said Ioan Smith, a strategist at Knight Capital Europe Ltd. in London. “So no imminent slowing in asset purchases equals ongoing support for the market.”
Bernanke told the Joint Economic Committee of Congress in Washington that the U.S. economy remains hampered by high unemployment and government spending cuts. He said that tightening policy too soon would endanger the recovery.
The Fed chairman has overseen the most aggressive economic stimulus in the central bank’s 100-year history in an effort to reduce an unemployment rate that stands at 7.5 percent.
Roche gained 3 percent to 258.50 Swiss francs after Citigroup upgraded the drugmaker to buy from neutral and raised its earnings-per-share forecast for 2017. Analyst Andrew Baum wrote in a report to clients that sales of tests or treatments for Her2-positive breast cancer will climb.
Schmolz & Bickenbach surged 14 percent to 2.90 francs after the steelmaker raised its outlook for 2013, citing an improvement in its order backlog and revenue. The company now expects to report earnings before interest, taxes, depreciation and amortization of 150 to 200 million euros.
Givaudan, the world’s largest maker of flavorings, added 1.6 percent to 1,281 francs. Novartis, the second-largest stock on the SMI by weight, gained 1.7 percent to 73.65 francs.