Bloomberg News

Swiss Stocks Snap Five-Day Rally After U.S. Home-Price Report

December 28, 2011

Dec. 27 (Bloomberg) -- Swiss stocks closed little changed, snapping a five-day rally, after a report showed home prices in 20 U.S. cities fell more than forecast in October.

UBS AG, Switzerland’s biggest bank, dropped 1.3 percent pacing losses among European lenders. Petroplus Holding AG, Europe’s largest independent refiner, sank 46 percent after its lenders froze about $1 billion in uncommitted loans under its revolving credit facility. Sonova Holding AG advanced 2.8 percent.

The Swiss Market Index, a measure of the largest and most actively traded companies, retreated 0.1 percent to 5,886.91 in Zurich. The gauge has rebounded 23 percent from this year’s low on Aug. 10 as policy makers intensified efforts to resolve the debt crisis. The wider Swiss Performance Index also fell 0.1 percent today.

“With small volume, the markets can move without much effort,” said Benno Galliker, a trader at Luzerner Kantonalbank in Lucerne, Switzerland. “The weak data on house prices certainly don’t help. Even so, the outlook for the whole week remains optimistic.”

The number of Euro Stoxx 50 Index futures that have changed hands is less than 20 percent of the average over the past 20 days on an intraday basis, according to data compiled by Bloomberg.

U.S. Economy

In the U.S., the Standard & Poor’s/Case-Shiller index of property values in 20 cities slid 3.4 percent in October from the same month in 2010. That was more than the average 3.2 percent drop forecast by 20 economists surveyed by Bloomberg.

Another report showed that the Conference Board’s consumer- confidence gauge rose to the highest level in eight months in December, to 64.6, from a revised 55.2 reading in November. That exceeded all estimates in a Bloomberg News survey.

Germany’s economy, Europe’s largest, is robust enough to withstand a more difficult European and global business environment, Handelsblatt cited Economy Minister Philipp Roesler as saying in an interview. Private consumption is sustaining growth and businesses are strong enough to be optimistic about the future, the German newspaper cited Roesler as saying.

UBS and Credit Suisse Group AG dropped 1.3 percent to 11.22 francs and 0.5 percent to 22.18 francs, respectively. Julius Baer Group Ltd., the 121-year-old wealth manager, slid 1.6 percent to 36.46 francs as a gauge of European banks was the worst performer of the 19 industry groups in the Stoxx Europe 600 Index.

Petroplus, Oridion Slump

Petroplus plunged 46 percent to 1.85 francs, the biggest slide since at least November 2006, according to data compiled by Bloomberg. The company today said about $1 billion in uncommitted loans under its revolving credit facility have been frozen by its lenders.

The loans are “critical” for business, Petroplus said, adding it’s looking at other strategic options to maintain its European refining and marketing operations.

“Today’s announcement is a serious issue as in the worst case, the company would lack the funds required to maintain operations,” Andreas Escher, an analyst at Vontobel Holding AG, wrote in a note to clients. “We strongly advise investors to stay clear of the stock until a sustainable financing can be restored.”

Oridion Systems Ltd., the Israeli maker of carbon-dioxide measuring devices, tumbled 37 percent to 6.5 francs, the biggest slump since at least April 2000. The company said the U.S. Food and Drug Administration imposed an import alert on all Oridion medical devices. The company added that fourth-quarter revenue growth will be minimal.

Sonova, the Swiss hearing-aid maker, rose 2.8 percent to 95.85 Swiss francs.

--With reporting by Adria Cimino in Paris. Editors: Srinivasan Sivabalan, Andrew Rummer

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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