Swiss Stocks Pare Gains as U.S. GDP Data Beats ForecastCorinne Gretler
Stocks in Switzerland pared their advance in the final hour of trading, leaving the Swiss Market Index little changed, as investors assessed a report showing that the U.S. economy expanded at a faster-than-expected pace.
Transocean Ltd. jumped 6.9 percent and Swiss Re Ltd. rallied to its highest price in more than five years after reporting third-quarter profits that exceeded analysts’ projections. Swisscom AG gained 2.3 percent after appointing its interim chief executive officer to the post permanently.
The SMI climbed 0.1 percent to 8,229.66 at the close in Zurich. The gauge earlier gained as much as 0.9 percent as the European Central Bank unexpectedly cut interest rates to a record low. The equity benchmark has rallied 21 percent so far in 2013, its best year-to-date performance since 2005. The broader Swiss Performance Index also rose 0.1 percent today.
“Mario Draghi knew that virtually no one expected a cut,” said Andreas Nigg, head of equity and commodity strategy at Vontobel Asset Management in Zurich. “The ECB was able to weaken the euro to combat the risk of deflation. A lower euro will help the larger, more international European companies to some extent, but I don’t expect this to be trigger for a new strong equity rally as it has little impact on the development of economic growth.”
In the U.S., a Commerce Department report showed that the world’s largest economy expanded at a faster-than-forecast pace in the third quarter. Gross domestic product rose at a 2.8 percent annualized rate after a 2.5 percent gain in the preceding period. The median forecast of economists surveyed by Bloomberg had called for a 2 percent advance.
The euro fell to its weakest level versus the pound since January as the ECB cut its benchmark rate to a record low after inflation dropped to the slowest pace in four years. Policy makers meeting in Frankfurt reduced the main refinancing rate by a quarter point to 0.25 percent. Earlier, the Bank of England maintained its key interest rate and its asset-purchase target.
Transocean rallied 6.9 percent to 47.23 Swiss francs, its biggest gain since Jan. 3. The offshore-drilling contractor posted third-quarter adjusted earnings per share of $1.37, beating the $1.07 that analysts had projected.
Swiss Re climbed 1.9 percent to 81.45 francs, its highest price since May 2008. The world’s second-largest reinsurer said third-quarter net income fell 51 percent to $1.07 billion. That still beat the $755 million average estimate of 10 analysts surveyed by Bloomberg. Swiss Re also confirmed its 2015 financial targets and said it may pay another special dividend.
Swisscom gained 2.3 percent to 473 francs, its highest price since February 2007. The country’s biggest phone company named Urs Schaeppi as the successor to Carsten Schloter, who died in July. The company also posted better-than-forecast sales and profit for the third quarter.
Kuoni Reisen Holding AG advanced 4.9 percent to 396 francs, its highest price since March 2011, after posting third-quarter earnings before interest and taxes of 97 million francs. That beat the 87 million francs analysts had expected.
“Kuoni can now look forward to a more promising future,” Patrick Hasenboehler, an analyst at J. Safra Sarasin, wrote in a note. “The group has the potential to substantially improve its profitability over the next few years.”
Barry Callebaut AG rose 5.8 percent to 1,000 francs, its highest price since June 2007, as the world’s largest maker of bulk chocolate posted full-year Ebit that beat estimates and confirmed its mid-term financial targets.
Nobel Biocare Holding AG fell 2 percent to 14.55 francs even as the dental-implant maker posted third-quarter profit of 8.9 million euros. That exceeded the 8.75 million euros that analysts had projected.
The volume of shares changing hands in SMI-listed companies was 47 percent greater than the average of the past 30 days, according to data compiled by Bloomberg.