Swiss Stocks Rebound From Weekly Loss on Iran DealCorinne Gretler
Swiss stocks advanced, after the biggest weekly loss since early October, as Iran’s commitment to limit its nuclear program reduced political risks for investors and pushed oil prices lower.
Novartis AG, Europe’s biggest drugmaker, climbed after Natixis SA advised investors to buy the stock. Swatch Group AG rose 1.4 percent after buying a retail chain in Dubai.
The SMI gained 0.7 percent to 8,304.05 at the close of trading in Zurich, snapping a four-day drop. It has rallied 22 percent this year, heading for the biggest annual rally since 2005, as central banks around the world pledged to leave interest rates low. The Swiss Performance Index climbed 0.6 percent today.
“The nuclear accord with Iran is helping sentiment,” said Konstantin Giantiroglou, head of investment advisory at Neue Aargauer Bank in Brugg, Switzerland. “Better economic news should drive the market further.”
The volume of shares changing hands in SMI-listed companies was 30 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.
Iran agreed to limit its nuclear program in exchange for as much as $7 billion in relief from economic sanctions for six months. The Asian nation and the six world powers it entered a pact with -- the U.S., U.K., Germany, France, Russia and China - - aim to conclude a comprehensive deal within six months.
The accord is the first major breakthrough in the dispute over Iran’s nuclear program since 2003. Questions over the purpose of that plan had increased the potential for conflict in the Middle East, sparked threats of military action by the U.S. and Israel, and raised concerns that the oil-rich region was heading for a nuclear arms race.
In the U.S., a report from the National Association of Realtors showed that pending sales of previously owned houses unexpectedly dropped 0.6 percent in October, following a revised 4.6 percent decline the previous month. Economists had forecast a gain of 1 percent, according to the median forecast of 39 economists in a Bloomberg News survey. Pending home sales dropped 2.2 percent from a year earlier.
Novartis climbed 0.8 percent to 72.75 Swiss francs, contributing the most to the SMI’s advance. Natixis raised the stock to buy from neutral, citing progress in research for a breast-cancer treatment and the company’s last week announcement of a $5 billion share buyback.
Swatch Group AG added 1.4 percent to 589.50 francs. The biggest maker of Swiss watches agreed to take over Dubai retailer Rivoli Investments LLC, gaining a network of 360 businesses across the Middle East.
“From a strategical point of view it makes sense for Swatch to take control about this important sales channel in the growing Middle East region,” Patrick Hasenboehler, an analyst at J. Safra Sarasin, wrote in a note to clients.
Tornos advanced 7.2 percent to 4.93 francs. The machine-tools maker said investor Walter Fust made a takeover offer at 4.70 francs per share. The stock had closed at 4.60 francs on Nov. 22.