Swiss Stocks Retreat After Industrial Production ReportInyoung Hwang
Swiss stocks declined from a four-week high as a report showed industrial output in the euro area contracted more than economists had forecast and Cie. Financiere Richemont SA declined.
Richemont lost 2.3 percent after the maker of Cartier watches reported revenue for the first five months of its financial year that missed analysts’ estimates. Holcim Ltd. lost 0.7 percent after Sanford C. Bernstein & Co. lowered its recommendation on the shares.
The Swiss Market Index retreated 0.2 percent to 8,033.45 at the close in Zurich. The equity benchmark has still surged 18 percent this year as central banks around the world pledged to leave interest rates low for a prolonged period of time. The broader Swiss Performance Index also fell 0.2 percent today.
“The euro-zone recovery will be very gradual and bumpy,” Martin van Vliet, an economist at ING Groep NV in Amsterdam, wrote in a note. “July’s sharp fall in industrial production is a clear reminder that while the euro-zone economy has left recession behind, the return to growth is fragile.”
A Eurostat release showed that industrial production in the 17-nation euro area slipped 1.5 percent in July from the previous month. The median forecast of economists in a Bloomberg survey had called for a contraction of 0.3 percent. Output from factories, mines and utilities rose 0.6 percent in June.
In the U.S., a Labor Department report showed that jobless claims declined last week to their lowest level since 2006 as upgrades to computer systems in two states caused those employment agencies to report fewer applications.
The Federal Reserve holds its next policy meeting on Sept. 17-18. Officials will decide whether to reduce its monthly asset purchases. The central bank’s chairman, Ben S. Bernanke, has said that policy makers may consider tapering if the economy grows in line with their forecasts.
Richemont lost 2.3 percent to 91.30 Swiss francs for the biggest decline on the SMI. Sales rose 9 percent, excluding currency fluctuations, in the five months through August, Geneva-based Richemont said today. Analysts had forecast revenue would rise 10 percent, according to the median of 21 estimates compiled by Bloomberg News. Sales in Asia have risen at a slower pace after the Chinese authorities introduced measures to stop people from offering watches and jewelry as bribes.
“The further decline in China is disappointing,” Allegra Perry, an analyst at Cantor Fitzgerald, wrote in a note.
Holcim lost 0.7 percent to 67.05 francs. Sanford C. Bernstein lowered its rating on the world’s largest cement maker to market perform from outperform, meaning that investors should not hold more of the shares than are represented in benchmark indexes. The brokerage said India remains a weak market. Holcim generates more of its sales from Asia Pacific than any other region.
Swiss Prime Site AG added 3 percent to 69.75 francs, its biggest one-day gain since Nov. 30. The real-estate company said profit increased 25 percent to 222.3 million francs ($239 million) in the first half.