Swiss Stocks Rise as ECB Holds Rates; Julius Baer Climbs

Swiss stocks advanced for a second day as the European Central Bank left its benchmark interest rate at a record low and after the Federal Reserve said the U.S. economy continued to grow at a “modest to moderate pace.”

Julius Baer Group Ltd. increased 3 percent, posting its longest winning streak in eight weeks, after Morgan Stanley upgraded its rating on the stock. Roche Holding AG, which accounts for 17 percent of the Swiss Market Index, retreated.

The SMI added 0.7 percent to 7,932.29 at the close in Zurich. The gauge briefly erased gains after the Egyptian Interior Ministry said a suspected car bomb exploded in Cairo. The SMI has rallied 16 percent so far this year, the third-best performance of 24 developed markets tracked by Bloomberg, as the economy of the 17-nation euro area returned to growth. The broader Swiss Performance Index also rose 0.7 percent today.

“For once, the pressure has been quite limited on the ECB to do anything,” Philipp Baertschi, chief investment officer for private clients at Bank J. Safra Sarasin AG in Zurich, told Anna Edwards on Bloomberg Television. “They’re quite pleased with the recovery starting now, with Europe coming out of recession. We see a broadening of the global recovery starting in the U.S.”

ECB policy makers left their benchmark interest rate unchanged at a low of 0.5 percent, matching all 56 estimates compiled by Bloomberg.

Beige Book

The U.S. economy, the world’s largest, continued to grow from early July through late August even as borrowing costs increased, the Fed said in its Beige Book survey of economic conditions. Increased spending on cars and housing helped the U.S. economy maintain the pace of expansion, the report said.

Julius Baer added 3 percent to 44.38 Swiss francs after Morgan Stanley raised its rating on the wealth manager to overweight, similar to a buy recommendation, from equal weight. Julius Baer may have as much as 600 million francs ($635 million) of excess capital in 2014 to 2015, Morgan Stanley predicted, giving the company greater flexibility to return cash to shareholders or make acquisitions.

U-Blox AG rallied 9.4 percent to 70.15 francs, its highest price since December 2007. The maker of positioning semiconductors forecast earnings before interest and taxes of 30 million francs and revenue of 220 million francs for the full year. It had projected Ebit of 28 million francs and revenue of 215 million francs. U-Blox added that sales to the automobile industry more than doubled in the first six months of 2013.

Transocean Ltd. rose 3.3 percent to 43.98 francs after Credit Suisse Group AG upgraded the offshore rig contractor to outperform from neutral, meaning that investors should hold more of the shares than are represented in benchmark indexes. The brokerage said the share price already reflects analysts’ cuts to earnings and sales forecasts because of lower rates for the company’s older rigs.

Roche lost 0.3 percent to 234.60 francs, for the biggest drag on the SMI.

Before it's here, it's on the Bloomberg Terminal.