Swiss stocks surged the most in five weeks as European Central Bank president Mario Draghi said policy makers will do whatever is needed to preserve the euro and ABB Ltd. and Syngenta AG (SYNN) advanced after reporting earnings.
ABB, a maker of factory robots and power-transmission equipment, rallied 5.2 percent after saying it’s more confident about the short-term outlook. Syngenta rose 3.6 percent as the world’s biggest producer of crop chemicals said first-half net income gained. Nestle SA (NESN), the largest food maker, gained 1.7 percent as competitor Unilever had better-than-estimated sales.
The Swiss Market Index (SMI) jumped 1.6 percent to 6,277.74 at the close in Zurich, the biggest gain since June 19. The benchmark measure has still dropped 1 percent from its 2012 high on March 16 amid concern the euro area’s sovereign-debt crisis has hurt the economy. The broader Swiss Performance Index rose 1.5 percent today.
“Draghi’s comments are a bullish sign for markets,” said Graham Bishop, an equity strategist at Exane BNP Paribas in London. “The tone got more aggressive and the message is clear: that markets should not fight the ECB.”
Swiss stocks extended gains after Draghi said it’s within the central bank’s mandate to tackle “premia” on government bonds when they “hamper the functioning of the monetary policy transmission channel.”
“Within our mandate, the ECB is ready to do whatever it takes to preserve the euro,” Draghi said during a speech in London today. “And believe me, it will be enough.”
The volume of shares in SMI-listed companies changing hands today was more than double the 30-day average today, according to data compiled by Bloomberg.
U.S. bookings for durable goods, which are meant to last at least three years, rose 1.6 percent in June, mirroring the May advance, a Commerce Department report showed today in Washington. The median forecast of economists surveyed by Bloomberg News had called for a 0.3 percent gain.
Fewer Americans than forecast filed first-time applications for unemployment insurance, data from the Labor Department showed, as the figure dropped by 35,000 in the week ending July 21 to 353,000.
ABB (ABBN) rose 5.2 percent to 16.61 Swiss francs, the biggest jump in 10 months. The company said it has received more orders at its power and automation businesses in China in recent months, as well as “sustained order growth across the portfolio in the U.S.”
Second-quarter net income fell 27 percent from a year earlier to $656 million, missing the average estimate of $710.8 million in a survey of analysts by Bloomberg.
Syngenta advanced 3.6 percent to 332 francs, the largest increase since October, after reporting first-half profit that met analysts’ estimates and saying the outlook for Latin America is positive as soybean prices rise to a record.
Net income increased 5 percent to $1.5 billion, after currency adjustments, the Basel, Switzerland-based company said. Analysts in a Bloomberg survey expected $1.46 billion.
Nestle, which has a 26 percent weighting in the SMI, rose 1.7 percent to 58.65 francs, the biggest advance in four months. Unilever, the maker of Flora spreads, reported a 5.8 percent increase in underlying revenue in the second quarter, topping the average estimate of 32 analysts surveyed by the company for a 4.8 percent gain.
UBS AG (UBSN), Switzerland’s biggest bank, advanced 2.7 percent to 10.33 francs after Draghi’s speech. A gauge of lenders was the best performing among 19 industry groups in the Stoxx Europe 600 Index. (SXXP)
Temenos Group AG (TEMN) climbed 8.2 percent to 13.15 francs even after the maker of banking software reported second-quarter earnings that missed estimates. The company reiterated its full- year growth forecasts and analysts at Deutsche Bank AG and Kepler Capital Markets upgraded the shares.
Logitech International SA (LOGN), the biggest maker of computer mice, dropped 1.6 percent to 8.81 francs after reporting a first-quarter loss that was more than twice as big as analysts had estimated.
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