Swiss Stocks Advance as Investors Await Fed Signals
Stocks in Switzerland rose, rebounding from a fourth straight week of losses, as investors awaited this week’s Federal Reserve meeting for indications on the duration of stimulus measures.
Cie. Financiere Richemont SA climbed 2.2 percent after HSBC Holdings Plc upgraded the luxury-goods company. Swatch Group AG, the biggest maker of Swiss watches, gained for a second day. ABB Ltd. (ABBN) increased 3.1 percent after appointing a new chief executive officer.
The Swiss Market Index (SMI) rallied 0.9 percent to 7,704.12 at 10:33 a.m. in Zurich. The benchmark gauge fell 1.9 percent last week for its longest stretch of losses in 13 months. It has pared this year’s advance to 13 percent amid speculation the Fed will start to taper its bond-purchase program. The broader Swiss Performance Index (SPI) also gained 0.9 percent today.
The volume of shares changing hands in SMI-listed companies was 23 percent greater than the 30-day average, data compiled by Bloomberg show.
The Fed will begin a two-day policy meeting tomorrow, with Chairman Ben S. Bernanke scheduled to speak on June 19. Bernanke will also deliver his semi-annual monetary policy report to Congress on July 17-18.
Recent losses in equities may provide opportunities. The Standard & Poor’s 500 Index of U.S. shares, which has fallen 2.5 percent from its May 21 record, rallied an average 16 percent over two years the last four times the Fed started raising interest rates, according to data compiled by Bloomberg.
Leaders of the Group of Eight industrial nations meet at a two-day summit in Northern Ireland starting today. European leaders will focus on the benefits of a trade agreement with the U.S. after the European Union authorized the start of talks.
Richemont advanced 2.2 percent to 84.90 Swiss francs. HSBC upgraded its recommendation on the shares to overweight, equivalent of buy, from neutral. The brokerage raised its 12-month price estimate to 104 francs from 82 francs, saying it expects an increase in sales and earnings for the company’s Cartier brand.
Swatch climbed 0.9 percent to 538 francs. HSBC analysts led by Erwan Rambourg wrote in a note that a growth in watch sales in mainland China should resume in October.
ABB gained 3.1 percent to 20.81 francs, the biggest advance since April 24, as the world’s largest supplier of power grids appointed Ulrich Spiesshofer as its new CEO. Spiesshofer, who will replace Joe Hogan in September, is the company’s head of discrete automation and motion.
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