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Heavy beating of the Stockholm Stock Exchange at its opening Monday trading

Monday, 23 April 2012
Stockholm Stock Exchange began the trading week with a real shellacking on Monday, where mainly short - cycle manufacturing company, commodity-related and banks led the way down.
Behind market free fall was weak international macro data and political unrest in Europe.
Swedish hard producers Alfa Laval, Sandvik took the floor seats, while telecom and pharmaceutical companies fared least badly.

"A number of technical levels have been broken. These may have triggered big sales. I have not seen any direct news that may have affected this free fall "said Mikaela Strand, a financial analyst at Handelsbanken Sweden.

The OMXS30 index closed 4.6 percent lower to 1007.3. With that Stockholm was significantly worse than the major European stock exchanges on Monday. Skr157 billion of stock market value went up in smoke. Stockholm also closed worst in Europa. In Frankfurt and Paris stock index lost about 3 percent for the same day.

The turnover on the Stockholm Stock Exchange was Skr17.1 billion. Including Chi-X, Burgundy, Turquoise and Bats, sales amounted to approximately Skr24.4 billion.

Uncertainty characterized Europe since Francois Hollande, the Socialist presidential candidate who promised to tear up the recently negotiated European financial pact, won the first round of the French election and is now widely tipped to win the final victory in two weeks.

Political uncertainty also in the Netherlands, where budget negotiations collapsed over the weekend and the prime minister submitted his resignation.
"This shows that even the stronger countries can implement clear cost savings. Problems can be solved with strong leadership, but in France and the Netherlands there is no leadership at present, "said Justin Stewart at Seven Investment - MarketWatch.

Additional negative ammunition to the market came from the purchasing managers’ index from several countries which turned to be weaker than expected. For the euro area, the purchasing managers index for manufacturing industry fell to 46.0 in April from 47.7 in March, its lowest rate in almost three years.

Among engineering companies it weighed on Alfa Laval with a decline of 6.8 percent to Skr133:90 since it first quarter results proved to be 7 percent below analyst expectations. Sales for the quarter were in line with expectations, but the margin and the cost was at a disappointment.

Other engineering companies with weak growth include Sandvik, down 6.3 percent and Atlas Copco, which also dropped 5.6 percent.

The Nordic banks also fell heavily, like many of their continental colleagues. SEB and Handelsbanken were down 4.5 and 4.8 percent respectively while Nordea lost 5.8 percent.

In terms of commodities, raw materials on the whole fell across the board, including copper down more than 2 percent to just over $ 8,000 per tonne. Boliden fell heavily by 5.2 percent to Skr101.50 and Lundin Mining dropped 5.0 percent to Skr30.12.

An exception in the commodities sector was diamond producer Lucara Diamond, a company within the Lundin Sphere, which rose 11 percent to Skr 7:10. The company announced on Monday that diamond production started at Karowegruvan in Botswana. Forecast that full production rate would be attained in the second quarter was confirmed.
By Team

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