Something is happening to the Stockholm stock exchange as it seem defying popular trend
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Tuesday, 09 August 2011
Something is happening to the Stockholm stock exchange as it seems to be defying the fears and noises that have led to the sharp falls in London and the rest.
The market has turned and the index which opened down just dramatically turned upward to fold down sharply again. After lunch, it picked up again and started to rise. We have looked around and are not seeing any reason for such a quick change of attitude in the market within a very short time. Why this situation…?
The first minute of the day saw the OMXS index down nearly 1 percent, but that came off after a few minutes of trade, and turned to gains. The positive trend was not prolonged, and this morning the index on the Stockholm Stock Exchange dropped just like leading European stock markets.
But after lunch it started to rise clearly again, while it was still sluggish in many places in Europe.
Market players are saying that there is at the moment no news or rumour but expectations from policy makers, especially the Swedish central bank, the Riksbank's monetary policy plan and international consensus expected to come out and pitch and present actions for the future.
On Tuesday, the market is likely hoping that the Federal Reserve should provide some information on the situation of the USA interest rates. The fact is that the policy rate has been stable at 0-0.25 per cent since December 2008 is something all are watching to see if there’ll be any movement.
Stock market upswing in the afternoon coincided with the U.S. futures which also went up. Among other engineering companies led the recovery.
Stock markets in Asia had a heavy fall during the night and early morning. Hong Kong Stock Exchange closed at -2.52, while the Nikkei index landed at -1.68 when the Tokyo Stock Exchange closed the morning.
Yesterday's trading session was the reddest for approximately three years in both Stockholm and New York, as a result of rising concerns about global economic and debt problems in the U.S. and Europe.
Credit rating agency Standard & Poor's downgrade of U.S. credit ratings late Friday, which added insult to injury. Stockholm Stock Exchange fell 5.1 percent on Monday and the Dow Jones closed at -5.55 percent. U.S. President Barack Obama made a public appearance on Monday that fuelled the market's scepticism:
He said he acknowledge that there will be consequences for the downgrade, but did not agree that there supposed to have been one. It appeared, however, that no evidence of action will, be there as there are currently absolutely no tools to use for that.
Engineering company which traded down sharply this morning turned up in the afternoon. Atlas Copco A shares rose 4.8 percent to Skr 130:60, Scania B was up 5 percent Skr106:30 and SKF B rose 4.2 percent to Skr 144:20.
Electrolux B, which backed down almost 40 percent since the beginning, recoil up 7.7 percent to Skr 116:90.
The defensive companies found in the lower regions of OMXS30 list includes, AstraZeneca which dropped 1.1 percent to Skr273, and SCA B shares fell 3.1 percent to Skr 77:95. TeliaSonera and Tele2, telecom leaders traded down 1.4 and 0.9 percent respectively.
Lundin Mining, which fell over 16 percent on Monday, lifted 11.3 percent to Skr 33:68. According to rumours in the market, mining giant BHP Billiton is planning to get together with zinc producer Nyrstar to place a bid on Lundin Mining, according to reports from Britain's The Telegraph in its online edition on Monday night.
Gold Company Nordic Mines ran 15.6 percent to SEK 53:75. The company announced that drilling results showed higher proven and probable gold reserves in Laiva mine in Finland. Gold prices climbed to new record highs on Tuesday.
At the time of the is posting, 15.00 Swedish time, the Stockholm stock market was up 1.4 percent
By Scancomark.se Team
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