• Sweden edition
 
Stock market continues downward slide

Stock market continues downward slide

Published: 19 Aug 2011 10:53 GMT+02:00
Updated: 19 Aug 2011 16:17 GMT+02:00

An index of banking stocks was off 3.3 percent in early trading, with SEB and Nordea experiencing the biggest drops. The manufacturing index continued its free-fall, dropping 4.4 percent.

The market had recovered slightly throughout the day 10.30am, with the OMXS closing down 1.9 percent for the day to 277.7, reaching its lowest level since the autumn of 2009.

Exchanges across Europe continued to fall on Friday, in part due to concerns about a possible double-dip recession in the United States.

"The fear of a new recession in the United States is reached dimensions which were nearly unthinkable just a few weeks ago," Close Brothers analyst Rabeya Khan told the Reuters news agency.

During a Friday afternoon press conference, Sweden's finance minister Anders Borg acknowledged the stock market's wild ride was stressful, but that markets were functioning normally.

"The stress level is high, but we nevertheless feel that things are more calm than previously. We've had contact with the authorities and with the exchange, and the exchange is of the opinion that the markets are indeed working," he said.

According to Borg, it's still too early to say how the Swedish economy will be affected by the stock market swings rocking exchanges across the globe, other than that growth will be lower than expected.

"There's a risk that it could develop into something more serious," he said.

"I feel that things in Sweden are relatively stable compared to 2008, but there is a risk that the liquidity problems in southern Europe and Europe's financial system could hit Sweden."

Following Thursday's precipitous fall of more than 6 percent, Swedish investors need time to reflect, according to SEB chief economist Robert Bergqvist, who welcomed a Friday with few statistic reports set to be released.

“People are in something of state of shock after what happened yesterday. I've worked on these issues for 25 years and have never confronted a problem of this complexity before,” he told the TT news agency.

Those with small savings margins or who need money in the short term should probably reduce their shareholdings, he advised.

Bergqvist believes that many investors are going to use the coming days to sit down in meetings and discuss the future and the make up of their portfolios.

“What is the likely economic, financial, and political situation going to be? Clients are very uncertain now and don't know how the situation should be dealt with,” he said.

Bergqvist described the situation as serious, with the risk of recession combined with the fact that many countries have little room to implement measures to defend against the effects of an economic downturn creating a particularly worrisome mix.

Interest rates are already hovering around zero, many countries have weak public finances, as well as budget deficits.

“On top of that there are a growing number of people who are beginning to question the future of the euro,” he said.

The fact that most traditionally available economic tools have already been used also adds to the uncertainty.

“We have to try new avenues now,” said Bergqvist.

Even if the current stock market slide tapers off, Bergqvist projects a rocky road ahead.

The turbulence is simply confirmation that stocks can be a risky investment.

“It's important to think about when you need to use your money,” he said.

The smaller the margins, the more important it is for investors to reduce the amount of shares in their portfolios, he said.

Bergqvist emphasised as well the importance of taking a long-term view.

“As things look now and in the coming years, one should probably invest with a 5 to 10, perhaps 15-year perspective,” he said.

TT/The Local/dl (news@thelocal.se)

Your comments about this article

11:48 August 19, 2011 by conboy
The "market" like all chronic human behaviour such as alcoholism and drug abuse now crave yet another tax payer inspired handout in the form of Eurobond obligations. The Euro may be threatened in the short term in it's current form but the truth is that the US dollar is now goosed as a reserve currency but many western institutions will not buy Euro's without political reform in the EU and a Franco/Dutch/German Euro obligation emission. Just what Merkel and Sarkozy have being trying to avoid.

More fun and games from our friends in the financial markets flushed as they are with tax payer inspired bank guarantees. The banks are the biggest social welfare recipients in the Western world and democracy cannot afford them! The market is wrong fundamentally wrong! Hail the holy market!
15:59 August 19, 2011 by Nemesis
Sweden is an irrelevant economy in the grand scheme of things.

Only the European core, US, China, Brazil, Japan, South Korea and India really matter at the present.

@ conboy

The sooner there is an EU eurobond, the better. That would need to be followed within about two months by an EU ministry of finance.

´Then we can turn on the neo-feudalistic markets and criminalise them with laws against short selling entire countries for personal amusement and short term profit at the expense of entire societies.
17:52 August 19, 2011 by Grokh
markets plunge and some people become richer, why not change the name from Stock market to "speculation gambling arena" = you're the house and you always win.
04:12 August 20, 2011 by mkvgtired
Nemesis, there is no doubt that a Eurobond would bring a considerable amount of stability to the Euro. It would transfer more of Germany's economic stability and wealth to the less productive Euro members. I hope this concept does not come to fruition. Not because I want to see the Euro fail. On the contrary, if the Euro abruptly failed it would not just be the European economies that suffered. Global economies would.

That being said, the German tax payers have suffered enough. It is not their job to finance everyone else's overspending. If the Euro can not survive without Eurobonds it is time to cut the rope to the anchors weighing it down. The German citizens did not get the benefits of all of the overgenerous Greek (et. al.) entitlement programs, so there is no reason that they should have to pay for them. Or the French, British, Swedish, US (via IMF), etc. taxpayers either.
Today's headlines
Pirate Bay
Pirate Bay founder gets three years in prison
A 2013 image of Svartholm Warg. Photo: TT

Pirate Bay founder gets three years in prison

Swedish "hactivist" Gottfrid Svartholm Warg has been sentenced to three-and-a-half years in prison for hacking crimes. READ  

Royal family
Princess Madeleine to make Nobel comeback
Princess Madeleine at a previous Nobel banquet. Photo: TT

Princess Madeleine to make Nobel comeback

Sweden's Princess Madeleine is scheduled to appear at the Nobel Festival in Stockholm in December, after taking time out from her royal duties to focus on looking after her daughter. READ  

Politics
'We knew that Israel would be critical'
Foreign Minister Margot Wallström (left), with Sweden's Prime Minister Stefan Löfven. Photo: TT

'We knew that Israel would be critical'

Sweden's Foreign Minister has told The Local she respects Israel's decision to recall its ambassador after Sweden officially recognized the State of Palestine, and laughed off comments about IKEA furniture made by her Israeli counterpart. READ  

Analysis
'Store up your sunlight hours before winter'
Doctors say we should make the most of the autumn sunshine. Photo: Shutterstock

'Store up your sunlight hours before winter'

Spending time outdoors this autumn will help you survive a cold, dark Swedish winter. Baba Pendse, Head of Psychiatry at Lund University shares his top tips for battling the seasonal blues with The Local. READ  

Sports
Plot for shared Scandi Winter Olympic bid
Skiers hit the slopes in Åre, western Sweden. Photo: TT

Plot for shared Scandi Winter Olympic bid

Norwegian sports officials have said they want to co-host the winter Olympics with Sweden in 2026. But there has so far been no official response from Sweden. READ  

National
Anti-Israel graffiti 'not a race crime': Court
Photo: TT

Anti-Israel graffiti 'not a race crime': Court

A teenage boy who painted anti-Israel slogans and symbols on the Concert Hall in Gothenburg has been convicted for the damages he caused, but he walked free from racial agitation charges. READ  

Entertainment
A closer look at Sweden's rising stars
Swedish actresses Sandra Huldt and Julia Ragnarsson. Julia (right) has been nominated for a Rising Star award. Photo: TT

A closer look at Sweden's rising stars

Like to be ahead of the game when it comes to the next big thing on the silver screen? We find out more about the Swedish nominees for the Rising Star award to be presented at Stockholm's International Film Festival next week. READ  

Science
Swedish women in two-year sex pill study
Contraceptive pills have been linked to mood swings. Photo: Shutterstock

Swedish women in two-year sex pill study

Three hundred women from across Sweden are taking part in a study designed to demonstrate that modern contraceptive pills don't lead to decreased libido or mood swings. READ  

National
Stockholm 'sinking' oil spill ship safe
The ship was rescued on Thursday. Photo: Swedish Coast Guard

Stockholm 'sinking' oil spill ship safe

After fears a ship carrying around 52 tonnes of oil could sink in Stockholm's archipelago, Sweden's Coast Guard said the vessel had been towed to safety. READ  

National
Dog attack policewoman acquitted on appeal
A scene from a video of the attack published by Dagens Nyheter

Dog attack policewoman acquitted on appeal

A policewoman accused of letting her dog attack a drunk man while she repeatedly hit him with a baton, has had her conviction overturned by a court in Stockholm. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Lifestyle
Stockholm's shocking take on Halloween
Sport
Top ten quotes from Zlatan Ibrahimovic
Business & Money
Get your own office in Gothenburg or Stockholm - free for a day
Gallery
People-watching: October 30th
National
Sweden remains fourth best for gender equality
Blog updates

31 October

Editor’s Blog, October 31st (The Local Sweden) »

"Hello readers, Welcome to our latest 60-second round-up of the week’s news. First, Sweden made headlines around the..." READ »

 

29 October

Scariest day (Blogweiser) »

"This is what’s frightening me on Halloween. http://www.youtube.com/watch?v=D4OFZVCu8J0&list=UUJu5J7jG4uoYSjWbpFsJBuQ Follow my posts on FB. ..." READ »

 
 
 
National
Timeline: Julian Assange sex allegations
Sport
World Cup ski race on 'fake' Stockholm slope
Society
An Arctic tradition: hunting and handicraft
Society
Stockholm taxis offer free therapy sessions
National
The Local meets Health Minister Gabriel Wikström
Gallery
Property of the week: Österåker
Society
Homeless turtles get Stockholm police ride
National
Construction worker has 'Sweden's best beard'
National
Italian musician jazzes up Sweden's Lapland
Gallery
Zlatan's career in pictures
Finest.se
Gallery
People-watching: October 25th and 26th
Lifestyle
'Swedes are funnier than they think'
National
Swedish town 'like Venice' after heavy rains
Lifestyle
What's On in Sweden: October 24th - 31st
Gallery
People-watching: October 22nd
Gallery
In Pictures: Prince Carl Philip and Sofia Hellqvist
Lifestyle
Eight things to love about renting a Swedish apartment
National
Vasa ship cannon blasted in Sweden
National
Sub hunt: Day-by-day
National
Sub hunt: Stockholm islanders share their fears with The Local
Sponsored Article
The best options for oversea transfers
National
Dentist gives free care to Roma beggars
Gallery
Property of the week: Malmö
Gallery
PHOTOS: 'Foreign activity' in Swedish waters
TT
Society
QUIZ: How good is your Swedish?
Society
The nudity... and nine other things expat men notice in Sweden
Gallery
People-watching: October 15th
Gallery
Your views: Should outdoor smoking be banned in Sweden?
Business & Money
Sweden has 'large hole' in finances
Sponsored Article
Introducing... Finding a job in Stockholm
Society
Monster salmon caught in northern Sweden
Gallery
Property of the week: Lorensberg
National
Scandinavia's child bride
National
Ebola crisis: How is Sweden preparing?
Business & Money
How Sweden is becoming a cashless society
Gallery
Stockholm Burlesque Festival 2014
National
How a little red horse became a symbol for Sweden
Gallery
People-watching: October 12th
Business & Money
The hottest start-ups from southern Sweden
National
Stockholm is 'best' region for well-being
Sponsored Article
How to catch the first lobster of the year
Team SCA
Sponsored Article
All-female SCA team takes off on Volvo Ocean Race
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

989
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se
If you want to drink, that’s your business.
If you want to stop, we can help.

Learn more about English-language Alcoholics Anonymous in Sweden. No dues. No fees. Confidentiality assured.
AA-EUROPE.ORG/SWEDEN