Debt and Korea cause Stockholm market fall

Increasing concern about the European debt crisis and renewed tensions between North and South Korea caused share prices in Stockholm to fall sharply on Tuesday.

The OMXS index fell in opening trading and the negative pattern continued all day.

Like other European stock markets, the Stockholm exchange was spooked by bad news from the Spanish banking sector and new cutbacks in a number of European countries. Deteriorating relations between North and South Korea added to worries.

“Basically, worry about debts is getting more entrenched and there’s concern that the economic recovery will lose traction,” said Robert Bergqvist, chief economist at SEB.

At the close of trading, the OMXS index had fallen 2.5 percent to 292.7, taking it close to its lowest point this year.

Banks were hardest hit: Swedbank shares fell 4.8 percent to 66.80 kronor, SEB was down 3.5 percent to 39.10 kronor, Handelsbanken fell 2.1 percent to 184 kronor and Nordea fell 2 percent to 60.60 kronor.

Among major non-bank shares, Electrolux was a big loser, falling 4.7 percent to 167.10 kronor. Trelleborg fell 5 percent to 43.70 kronor, Ericsson fell 2.6 percent to 78.1 kronor and H&M was down 1.3 percent to 420.70 kronor.

The fall in Stockholm mirrored developments on other EU markets. London’s FTSE 100 index was down 2.5 percent, Paris’s CAC-40 was down 2.9 percent and the Frankfurt DAX was down 2.3 percent.

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