Shares in watchmakers Swatch Group and Richemont fell on Tuesday after the decline in Swiss watch exports accelerated in October.

"A recovery had been expected in the fourth quarter, but watch industry exports in fact reported their steepest fall of the year in October," the Federation of the Swiss Watch Industry (FH) said in a statement.

Exports of Swiss timepieces were down 16.4 percent in nominal terms in October, their steepest fall this year, dragged down by shipments of precious metal watches that have fallen out of favour with Chinese shoppers since the Chinese government took anti-graft measures.

Shares in Swatch, the world's biggest watchmaker, dropped 3.5 percent by 0824 GMT, while Richemont, which can rely on jewellery sales to cushion the impact of sluggish watches, fell 2 percent. The European personal and household goods index was up 0.1 percent.

"We remain concerned about the Swiss watch industry's negative sales trends in a fixed-cost environment in particular ahead of the important festive season and continued disruption in Hong Kong, the Swiss watch industry's largest and most profitable market," Citi analyst Thomas Chauvet said in a note.

Shipments to Hong Kong, where retailers sit on piles of unsold stock, were down 21.5 percent, while sales to the United States, the second-biggest market, fell 16.5 percent.

ZKB analyst Patrik Schwendimann said he was surprised by the strong decline, saying watchmakers may have voluntarily exported less in October in order not to build up more stock at retailers.

Watchmakers' inventories are at very high levels, at 5.39 billion euros ($5.73 billion) for Richemont at the end of September, and at 6.29 billion Swiss francs ($6.23 billion) at Swatch at the end of June.

($1 = 0.9411 euros)

($1 = 1.0099 Swiss francs)