Swiss Stocks Retreat to Three-Week Low as Novartis Slides

Swiss stocks declined to a three-week low, dragging the benchmark Swiss Market Index to a second straight week of losses, as health-care companies fell.

Novartis AG fell 1.2 percent. Noble Biocare Holding AG slid 3.4 percent after UBS AG downgraded its recommendation on the maker of dental implants. Galenica AG surged 8.1 percent after winning approval from the U.S. Food and Drug Administration for its Injectafer drug to treat anemia.

The SMI slipped 0.9 percent to 7,796.84 at the close of trading in Zurich, the lowest level since July 5. The index has dropped 1.7 percent this week, for its biggest decline in more than a month. The broader Swiss Performance Index declined 0.8 percent today.

“The SMI is driven down mainly by heavy weighted defensive stocks: Novartis, Roche and Nestle,” said Peter Stenz, a Zurich-based portfolio manager at Swisscanto Asset Management AG, which oversees about $57 billion. “Roche and Novartis have recently released good half-year figures. Nonetheless some investors are taking profits after the good run year to date of both stocks.”

The SMI has still climbed 24 percent since European Central Bank President Mario Draghi said policy makers will do whatever is needed to preserve the euro at a speech in London one year ago today. The measure is up 14 percent in 2013.

The volume of shares changing hands in SMI-listed companies today was 4.5 percent less than the average of the past 30 days, according to data compiled by Bloomberg.

Novartis, Roche

Novartis, Europe’s biggest drugmaker, declined 1.2 percent to 66.20 Swiss francs, the lowest in a month. Roche Holding AG, the largest maker of cancer drugs, lost 0.7 percent to 233.10 francs, paring an earlier decline of as much as 1.4 percent. Nestle SA slid 1.1 percent to 61.85 francs, the biggest retreat since July 3. The three companies make up 57 percent of the SMI’s weighting.

Nobel Biocare slid 3.4 percent to 11.40 francs, the biggest drop in more than a month, as UBS downgraded its recommendation on the shares to sell from neutral.

ABB Ltd., the world’s largest maker of power transformers, lost 1.1 percent to 20.55 francs, as Exane BNP Paribas cut the shares to underperform from neutral. The stock slumped 3.1 percent yesterday after the company said lower power-utility investments in Europe weighed on orders.

“ABB is down after yesterday’s release of first-half figures,” Stenz said. “Analysts will probably trim down their earnings expectations.”

Logitech International SA fell 1.1 percent to 6.60 francs after Le Temps said the maker of computer mice put on hold plans to sell its remote-control unit.

Baloise Falls

Baloise Holding AG, the 150-year-old Swiss insurer, lost 1.7 percent to 99.35 francs. Berenberg Bank cut its rating on the stock to hold from buy, saying the potential for gains is largely priced in.

Galenica jumped 8.1 percent to 670 francs, the highest since at least 1989. Galenica’s U.S. partner, Luitpold Pharmaceuticals Inc., will begin selling Injectafer immediately, the drugmaker said.

Panalpina Welttransport Holding AG soared 10 percent to 130.40 francs, the highest since January 2011, as second-quarter net income jumped 43 percent. The company said it may gain market share in air freight after volume in that business rose in the second quarter for the first time in two years.

Interroll Holding AG rallied 2 percent to 419 francs, gaining for a third day, as the maker of conveyor belts forecast first-half net income will grow by about 10 percent to 12 percent. The company is scheduled to publish first-half results on Aug. 9.

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