Swiss stocks rose, rebounding from four weeks of declines, as China’s pledge to boost growth outweighed speculation that Greece will leave the euro.
UBS AG (UBSN), the biggest Swiss bank, advanced 1.1 percent after a report that investment inflows to Switzerland have surged because of mounting concern about the future of the euro area. Cie. Financiere Richemont SA and Swatch Group AG (UHR), the country’s largest watchmakers, gained more than 2 percent.
The Swiss Market Index (SMI) increased 0.3 percent to 5,814.59 at the close in Zurich, trimming this year’s decline to 2.1 percent. The gauge dropped 2.6 percent last week as Greece’s politicians failed to form a government and the country’s president called a second election for June 17. The Swiss Performance Index also rose 0.3 percent today.
“This rally is being driven by hope of policy steps, possibly from China or EU leaders, while data are all less than ideal,” said Witold Bahrke, a senior strategist at PFA Pension A/S in Copenhagen, where he helps oversee $55 billion. “Global stocks erased gains made earlier this year so a short term relief is just natural.”
China’s Premier, Wen Jiabao, said China will focus on bolstering economic growth to combat a slowdown in the world’s second-largest economy.
Wen called for “putting stabilizing growth in a more important position” and didn’t mention concern about inflation in remarks published yesterday by the official Xinhua News Agency. China may announce stimulus measures in the near term, according to a front-page commentary today in the China Securities Journal, published by Xinhua.
Germany’s Finance Minister, Wolfgang Schaeuble, will discuss the euro at a meeting with his newly installed French counterpart, Pierre Moscovici, in Berlin today as European Union leaders prepare for a meeting in Brussels on May 23.
Group of Eight leaders on May 19 urged Greece to stay within the euro area as polls in the country showed a close race between parties supporting and opposing the austerity measures contained in the EU-led bailout.
IG Metall, Europe’s biggest manufacturing union, said it reached a deal with employers in the electrical and metal industries to increase wages by 4.3 percent for workers in the German state of Baden-Wuerttemberg.
The salary boost will apply to 800,000 employees starting from May 1, IG Metall said after reaching the agreement with Suedwestmetall, the manufacturers’ association. The state, which is home to companies such as Daimler AG, Porsche SE and Robert Bosch GmbH, is the union’s benchmark region for contracts nationwide.
UBS Shares Advance
UBS climbed 1.1 percent to 10.81 Swiss francs after NZZ am Sonntag reported that financial-market inflows to Switzerland were as much as four times greater than normal on some days last week. The newspaper cited an unidentified major business partner of Switzerland’s biggest bank.
Swatch rose 2.4 percent to 386 francs and Richemont, the maker of Montblanc pens and Cartier jewelry, gained 2.9 percent to 57.70 francs.
The SMI’s valuation has fallen to 11.7 times the estimated earnings of its companies, near the lowest level since January, according to data compiled by Bloomberg. The volume of shares changing hands on the index today was 20 percent lower than the average of the last 30 days.
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