Bloomberg News

Swiss Stocks Slide to One-Month Low Amid U.S. Debt-Ceiling Talks

October 07, 2013

Stocks in Switzerland fell to a one-month low as the U.S. government shutdown entered a seventh day and lawmakers made little progress on a deal to avert a possible debt default.

UBS AG (UBSN), the biggest Swiss bank, declined 2.3 percent for the biggest drop in the Swiss Market Index. Cie. Financiere Richemont SA, the maker of Cartier jewelry and IWC watches, lost 1.4 percent.

The SMI slid 0.8 percent to 7,876.93 at 11:54 a.m. in Zurich, the lowest since Sept. 6. The benchmark gauge has retreated 1.8 percent this month as U.S. lawmakers failed to agree on a federal budget, partially closing government operations and setting up a showdown over the nation’s authority to borrow. The broader Swiss Performance Index also decreased 0.8 percent today.

House of Representatives Speaker John Boehner said yesterday in an interview on ABC that Republican lawmakers can’t pass a debt-ceiling increase without packaging it with other provisions, something President Barack Obama has said is unacceptable. Boehner said the country could default if Obama doesn’t negotiate.

Without an increase to the debt limit, the U.S. will exhaust its borrowing authority on Oct. 17 and would run out of funds to pay all of its bills sometime between Oct. 22 and Oct. 31, according to the Congressional Budget Office. The House and Senate weren’t in session yesterday and there were no meetings planned between the two sides.

The SMI (SMI) rose 3.6 percent in September, extending its gain last quarter to 4.4 percent, as the Federal Reserve maintained the pace of its monthly bond purchases. The gauge has rallied 15 percent in 2013.

The volume of shares changing hands in SMI-listed companies today was 15 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.

To contact the reporter on this story: Andrew Rummer in London at arummer@bloomberg.net

To contact the editor responsible for this story: Chris Nagi at chrisnagi@bloomberg.net


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