• 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)

Don't miss...X
Left Right

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
Swimrun
Record win at Sweden's tough island race
Photo: Jakob Edholm/ÖTILLÖ14

Record win at Sweden's tough island race

Two Swedes crushed last year's course record at the Swimrun world championship in Stockholm's archipelago on Monday. READ  

Sweden reveals Academy Award submission
Swedish director Ruben Östlund on set. Photo. TT

Sweden reveals Academy Award submission

The movie set to represent Sweden at the 2015 Academy Awards was revealed on Monday, a film that has already won awards abroad. READ  

Amphetamines
Hidden forest drug stash leads to prosecution

Hidden forest drug stash leads to prosecution

A 53-year-old man has been prosecuted after police in western Sweden made one of their largest drug seizures in the area. READ  

Man shot dead in hunting accident
Photo: Hunter Desportes/Flickr

Man shot dead in hunting accident

UPDATED: Police in northern Sweden say a man was killed on Monday morning after what they described as a "hunting accident". READ  

Pirate Bay Swede's trial set for final stage

Pirate Bay Swede's trial set for final stage

The mother of Swedish Pirate Bay co-founder Gottfrid Svartholm Warg has told The Local about her son's "suffering" in jail ahead of the final stages of his trial. READ  

Suspected Ebola case ruled out in Sweden
Photo: Fredrik Sandberg/TT

Suspected Ebola case ruled out in Sweden

UPDATED: Officials at a Stockholm hospital reported that they had found a suspected case of the Ebola virus on Sunday night. But the case was dismissed on Monday. READ  

Murderer on the loose after breakout

Murderer on the loose after breakout

A 34-year-old man who killed a child is on the run after he broke out of a psychiatric ward in central Sweden. READ  

Skåne floods
Huge clear up underway after Skåne floods
A Malmö bus under water. Photo: Stig Åke Jönsson/TT

Huge clear up underway after Skåne floods

Flood waters subsided in the southern Sweden region of Skåne on Monday, after flash flooding saw chaos on roads and trains at the weekend. READ  

Elections 2014
Sweden's Alliance reveals full manifesto
Photo: Henrik Montgomery/TT

Sweden's Alliance reveals full manifesto

UPDATED: Leaders of the Moderate Party, the Centre Party, the Liberal Party and the Christian Democrats have announced their complete list of election promises in Stockholm's Nacka. READ  

Zlatan scores hat trick in PSG thrashing
Photo: AP

Zlatan scores hat trick in PSG thrashing

Champions Paris Saint-Germain thumped Saint-Etienne 5-0 as Bordeaux saw their 100 percent record at the start of the Ligue 1 season ended on Sunday with a 1-1 draw against Bastia. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Tech
Sweden's highest peak to lose title next year
Politics
How immigration became a key election issue
Society
Brit's life in Sweden becomes BBC radio show
Gallery
People-watching August 27
Gallery
Top ten false friends in Swedish
Blog updates

25 August

Hit och dit, här och där (The Swedish Teacher) »

" Hej igen! A common challenge for Swedish language students are the location adverbs hit/här, dit/där, hem/hemma etc. Some of the location adverbs come in two versions. We should use one type of location adverb when we use a verb describes where we are, and we should use the other type of location adverb when we the verb..." READ »

 

25 August

The Dollar Store (Blogweiser) »

"A dollar store in Sweden. Blog post: http://t.co/tNuuvcP1q0 #USD #greenbacks #sweden #sverige pic.twitter.com/RHFAYf7U1k — Joel Sherwood (@joeldsherwood) August 23, 2014 There’s a chain here in Sweden called The DollarStore. This name always stood out to me in a country where they don’t use dollars. I went there for the first time this weekend. They actually accepted greenbacks..." READ »

 
 
 
National
Roma advocate scoops Wallenberg prize
Society
Meet the man who made a Swedish store recall its high heels for kids
Business & Money
'How I came to run my own business in Sweden'
Politics
Expert explains why Sweden's election oozes uncertainty
National
City plays Schindler's List theme at Nazi rally
Society
For Stockholm Fashion Week, here's the A-Z of Swedish fashion
National
'Amnesiac' man avoids deportation for ten years
Gallery
Princess Estelle through the years
Business & Money
Swedish city all set for six-hour workday trial
Business & Money
Five golden rules for the Swedish job hunt
Sponsored Article
Graduates: Insure your income in Sweden with AEA
Gallery
People-watching August 22-24
National
Armed royal guards caught (very) drunk on the job
National
Sweden orders textbook on Roma discrimination
Gallery
Violent anti-Nazi demonstrations in Malmö
Society
A closer look at Sweden's five official minority languages
Gallery
See the destruction from the southern Sweden floods
Politics
'Sweden Democrats hold the key to elections'
Society
Swedes celebrate first day of smelly fish season
Sponsored Article
Find out what gives this Swedish school executive appeal
Sponsored Article
Introducing...Your finances in Stockholm
Sponsored Article
Introducing...Housing in Stockholm
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

747
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