Stockholm Stock Exchange ended its trading where it was expected – new low for year


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Monday, 08 August 2011
It was already known that the Stockholm OMXS index will reach record low for the year in today’s trading following the US credit downgrade.

A market which had no confidence sine the start of the year took the downgrade as a new pretext for panic selling to proceed. As such when prices on the Stockholm Stock Exchange plummeted again, it was not at all a surprise.

The Index at the close of trading today was down minus 5 percent on Monday afternoon, and now the stock market has lost over 23 percent of its value since the news year of trading started

The fall occurred despite the European Central Bank earlier in the day promising to support the purchase of Spanish and Italian government bonds in an effort to calm markets. This led to bond yields to fall sharply, but the measure seems to have calmed investors somewhat.

The sentiment is still marked by a concern about the debt crises in the U.S. and Europe and a declining world economy.
It was also in connection with when the stock markets opened in New York that prices on the Stockholm Stock Exchange began to fall big time.

"It went very fast. I think the cautious trading this morning was pending that the U.S. stock markets would open, "said Martin Bj´┐Żrsell, equity strategist at Handelsbanken.

The downgrade of the U.S. credit rating last Friday by Standard & Poor's and has sent a sense of shock across the country. For the first time the U.S. was no longer having a highest rating of AAA.

The credit rating agency S & P announced also on Monday that it was lowering the rating for mortgage giants Freddie Mac and Fannie Mae from AAA to AA +. The companies were taken over by the government in connection with the financial crisis in 2008.
By Team

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