Swiss stocks advanced to a two-month high as better-than-forecast manufacturing reports from Switzerland to China and Japan eased concern that global economic growth is slowing.
UBS AG (UBSN), the nation’s largest lender, climbed 1.4 percent. Transocean Ltd., the owner of deepwater oil rigs, increased 0.8 percent after crude surged the most in more than three years on June 29.
The Swiss Market Index (SMI) rose 0.7 percent to 6,109.41 at the close in Zurich, the highest since April 27. It advanced 1.3 percent last week as European leaders opened the door to directly recapitalizing lenders using the European Stability Mechanism, the euro area’s permanent bailout fund. The broader Swiss Performance Index also gained 0.7 percent today.
“The positive sentiment generated by the euro-zone summit has been carried over the weekend by better-than-expected Chinese PMI figures and stronger readings from the Japanese Tankan survey,” said James Knightley, senior economist at ING Groep NV in London. “These have offered hope that the global economy may not be slowing as quickly as many feared.”
The volume of shares changing hands in companies listed on the gauge was 21 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.
Switzerland’s manufacturing contracted less in June than economists had predicted. The procure.ch Purchasing Managers’ Index stood at 48.1, when adjusted for seasonal swings, Credit Suisse said in Zurich today. Economists had forecast a reading of 45, the median of 11 estimates in a Bloomberg survey showed. A PMI below 50 indicates contraction.
In China, the government’s PMI fell to 50.2 in June from 50.4 in May, the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing reported. That beat the 49.9 median estimate in a survey of 24 economists.
A separate PMI, compiled by HSBC Holdings Plc and Markit Economics, posted a final reading of 48.2 in June compared with 48.4 in May, according to a release today. A report showed that new house prices advanced for the first time in 10 months.
In Japan, large manufacturers became less pessimistic as declining commodity prices aided profitability, boosting the outlook for the world’s third-biggest economy. The Bank of Japan’s quarterly Tankan index of sentiment was minus 1 in June compared with minus 4 in March. The median estimate of 19 economists surveyed by Bloomberg had called for a reading of minus 4. A negative number means pessimists outnumber optimists.
The European Central Bank and the Bank of England announce interest-rate decisions on July 5. ECB officials will lower their benchmark rate by 25 basis points to a record low 0.75 percent, according to the median forecast in a Bloomberg survey of 61 economists. Five predict a cut of 50 basis points and 11 foresee no change.
“With the European Central Bank and the Bank of England set to offer more stimulus, the market is more inclined to go with the flow and continue pushing higher,” said ING’s Knightley.
Swiss stocks pared their gains after a U.S. report showed that manufacturing unexpectedly shrank in June, the first contraction since 2009. The Institute for Supply Management’s factory index fell to 49.7 from 53.5 a month earlier, missing the median forecast of 60 economists in a Bloomberg survey that called for a drop to 52.
Financial shares gained, with UBS adding 1.4 percent to 11.20 Swiss francs. Baloise Holding AG (BALN) rose 1.4 percent to 63.40 francs and Swiss Life Holding AG (SLHN), the country’s biggest life insurer, climbed 1.2 percent to 90.10 francs.
Transocean advanced 0.8 percent to 42.54 francs as a gauge of European oil and gas producers rallied. Crude surged 9.4 percent to $84.96 in New York trading on June 29.
Sulzer AG (SUN), the world’s second-biggest maker of pumps, jumped 2.2 percent to 114.50 francs after Chief Executive Officer Klaus Stahlmann told SonntagsZeitung the company is seeking acquisitions and could spend as much as 1 billion francs ($1.1 billion). He also said Sulzer could expand its petrochemicals services and components businesses geographically.
Bucher Industries AG (BUCN), the agricultural machinery maker, advanced 4.1 percent to 157.60 francs. Andre Rudolf von Rohr, an analyst at UBS, raised the stock to buy from neutral.
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