Bloomberg News

Swiss Stocks Climb for First Time in Four Days

October 11, 2012

Swiss stocks rose for the first time in four days as demand increased at an Italian debt sale and U.S. jobless claims fell to a four-year low.

Cie. Financiere Richemont SA and Swatch Group Ltd. advanced more than 3 percent after the U.K.’s Burberry Group Plc reported second-quarter sales that exceeded analyst estimates.

The SMI (SMI) gained 0.4 percent to 6,654.02 at the close in Zurich. The 20-share measure has rallied 16 percent since this year’s low on June 4 as the European Central Bank unveiled an unlimited bond-buying program and the Federal Reserve started its third round of quantitative easing. The broader Swiss Performance Index climbed 0.4 percent today.

“ECB president Mario Draghi really made a difference much bigger than I or the market had hoped for a year ago,” said Morten Kongshaug, the chief equity strategist at Danske Bank A/S in Copenhagen. “The risk of a collapse of the euro is really off the table.”

The ECB has announced a bond-purchase program called the Outright Monetary Transactions, under which it will buy securities of indebted nations that comply with rescue conditions.

Italy’s Treasury sold 3.75 billion euros ($4.8 billion) of its benchmark three-year securities, the maximum sales target, to yield 2.86 percent. Investors bid for 1.67 times the amount sold, up from 1.49 times at the last auction of the debt on Sept. 13. That pushed the country’s 10-year yields lower for the first time in four days.

American Jobs

In the U.S., first-time applications for jobless benefits dropped 30,000 to 339,000 in the week ended Oct. 6, the fewest since February 2008, Labor Department figures showed. Economists forecast 370,000 claims, according to the median estimate in a Bloomberg survey.

Standard & Poor’s cut Spain’s rating to BBB-, one level above junk, from BBB+, citing increased economic and political risks. The downgrade came after Spain announced a fifth austerity package in less than a year and published details of stress tests of its banks.

Cie. Financiere Richemont, the owner of the Cartier brand, advanced 4.5 percent to 59.90 Swiss francs. Swatch Group AG (UHR), the biggest maker of Swiss watches, climbed 3.2 percent to 380 francs. Burberry led European personal and household-goods stocks higher after its second-quarter same-store sales beat forecasts that called for a drop.

Cytos, Dufry

Cytos Biotechnology AG (CYTN) jumped 9.5 percent to 3.01 francs, its highest price in 13 months. The maker of biopharmaceuticals on Oct. 9 appointed Christian Itin as the new chief executive officer. The shares have gained 18 percent so far this month.

Dufry (DUFN) declined 0.4 percent to 114.3 francs after the operator of Hudson News stores in airports sold 2.7 million shares at 109 francs apiece.

Dufry yesterday agreed to buy a 51 percent stake in Folli- Follie Group’s travel retail business. The company is paying 200.5 million euros for the stake, which it is financing through the share sale.

Meyer Burger Technology AG (MBTN), the biggest maker of solar- panel manufacturing equipment, slid 1.2 percent to 12.05 francs. The U.S. Commerce Department revised penalties it will impose on solar-energy equipment imported from China, increasing anti- subsidy duties it had previously announced.

To contact the reporters on this story: Srinivasan Sivabalan in London at ssivabalan@bloomberg.net; Peter Levring in Copenhagen at plevring1@bloomberg.net

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


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