Swiss stocks closed little changed at a one-month low as declines in health-care companies offset a rally in banks.
Roche Holding AG (ROG) led drugmakers lower. UBS AG (UBSN) and Credit Suisse Group AG (CSGN), Switzerland’s largest lenders, rose as HSBC Holdings Plc recommended buying European banking shares. Givaudan SA (GIVN), the world’s biggest maker of flavors and fragrances, climbed 3.7 percent after reporting an increase in first-quarter sales.
The Swiss Market Index (SMI), a measure of Switzerland’s largest and most actively traded companies, slipped less than 0.1 percent to 6,059.82 at the close in Zurich, having fluctuated between gains ans losses at least 20 times. The gauge has retreated for three straight weeks as borrowing costs rose in Spain and the Federal Reserve indicated it will hold off from making further asset purchases. The broader Swiss Performance Index increased less than 0.1 percent today.
“European markets are up today, with cyclical stocks rallying,” said John Plassard, director at Louis Capital Markets SA in Geneva. “Swiss stocks are not performing as well as its defensive aspect is less attractive today as investors are going for more risky stocks.”
The number of shares changing hands on the SMI today was 20 percent higher than the 30-day average, according to data compiled by Bloomberg.
Prime Minister Mariano Rajoy said Spain faces a “huge” task generating jobs and growth as it looks to rein in its budget deficit. Reducing the shortfall in public finances is the government’s “greatest urgency,” Rajoy told members of his governing People’s Party in a meeting at the national parliament in Madrid today.
“Amid fears that Europe’s sovereign-debt crisis is taking another turn for the worse, debate has intensified if global equities are set for a period of medium-term weakness,” said Cameron Peacock, a market strategist at IG Market in Melbourne. “With investors still sitting on healthy profits, the ‘sell in May and go away’ mentality might have arrived early this year, and could see equities trade with a negative bias over the remainder of the first half.”
European Central Bank Executive Board member Benoit Coeure triggered speculation that the bank will revive its bond- purchase program to lower Spain’s borrowing costs as the region’s debt crisis threatens to boil over again.
Spanish “market conditions are not justified,” Coeure, who heads the ECB’s market operations division, said at an event in Paris today. “Will the ECB intervene? We have an instrument, the securities markets program, which hasn’t been used recently but it still exists.”
Roche, the world’s largest maker of cancer drugs, slid 0.4 percent to 154.30 Swiss francs as a gauge of health-care companies was the second-worst performer among the 19 industry groups in the Stoxx Europe 600 Index.
Sonova Holding AG (SOON) retreated 1.3 percent to 99.50 francs, a second day of losses, as UBS named the hearing-aid maker as one of its least preferred stocks.
SGS SA (SGSN), the world’s largest product-inspection company, fell 0.6 percent to 1,728 francs. The company said it acquired Metlab Pty. Ltd., a metallurgical testing laboratory.
UBS and Credit Suisse gained 1 percent to 11.65 francs and 0.5 percent to 23.91 francs, respectively. HSBC raised European banks to overweight, the equivalent of buy, from neutral for the first time in four years.
Julius Baer Group Ltd. (BAER) jumped 4 percent to 35.65 francs. The 121-year-old Swiss wealth manager is still interested in value-adding acquisitions, provided that key criteria are met, Chief Executive Officer Boris Collardi told shareholders at a meeting today.
Givaudan climbed 3.7 percent to 894.50 francs as first- quarter sales increased 4.7 percent to 1.06 billion francs ($1.16 billion). Revenue growth was in line with Givaudan’s target of expanding by between 4.5 percent and 5.5 percent each year.
Holcim Ltd. (HOLN), the world’s second-biggest cement maker, gained 1.1 percent to 56 francs as CA Cheuvreux resumed coverage of the stock with an outperform recommendation, the equivalent of a buy rating.
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