Swiss Stocks Post Biggest Two-Day Decline in Three MonthsCorinne Gretler
Swiss stocks fell, posting their biggest two-day drop in three months, as a report showed companies in the U.S. hired more people than expected, spurring concern the Federal Reserve will reduce monthly bond purchases.
Sika AG, which makes construction chemicals, declined 1.5 percent. Barry Callebaut AG climbed 1.7 percent after Vontobel Holding AG recommended buying shares in the world’s largest maker of bulk chocolate.
The Swiss Market Index lost 0.8 percent to 8,045.54 at the close of trading in Zurich, extending yesterday’s 1.8 percent decline. The equity benchmark has still climbed 18 percent this year as central banks around the world pledged to keep interest rates low for a prolonged period of time. The broader Swiss Performance Index also retreated 0.8 percent today.
“It’s the fear that tapering may come sooner rather than later,” said Christian Zogg, who manages about $540 million as head of equity and fixed income at LLB Asset Management AG in Vaduz, Liechtenstein. “Investors are eagerly awaiting Friday’s employment data. I believe that the market is simply taking a good breather after the impressive up moves we’ve seen.”
The ADP Research Institute’s report showed that American companies added more workers in November than economists had predicted. Net hires climbed to 215,000, the most in a year, from a revised gain of 184,000 in October. The median forecast of economists surveyed by Bloomberg had called for an advance of 170,000 last month.
A Labor Department report on Friday may show the unemployment rate fell to 7.2 percent. That would match the lowest level since 2008.
A Commerce Department release showed property developers sold 444,000 new houses at an annualized rate in October, the biggest gain in three decades, exceeding the 429,000 that economists had forecast in a Bloomberg survey. New-house sales in September fell short of economists’ forecasts.
The Federal Reserve will publish its Beige Book after the close of European markets today, providing anecdotal reports on the economy from its 12 districts. The Federal Open Market Committee meets to consider changes to its $85 billion of monthly bond buying on Dec. 17-18. Officials said at their Oct. 29-30 meeting that they may slow their asset purchases if the economy improves as forecast.
Sika retreated 1.5 percent to 2,913 Swiss francs, posting its biggest two-day drop in 11 weeks.
Barry Callebaut rose 1.7 percent to 1,025 francs as Vontobel raised the stock to buy from hold. The brokerage said that the company’s acquisition of Petra Foods Ltd. gives it greater access to emerging markets and also broadens its source of cocoa beans.
Julius Baer Group Ltd., Switzerland’s third-biggest wealth manager, added 1 percent to 41.29 francs for the largest gain on the SMI today.
The volume of shares changing hands in companies listed on the SMI was 8.7 percent greater than the average of the past 30 days, according to data compiled by Bloomberg.