The Swedish national holiday of Midsummer's Eve meant the Stockholm exchange was closed on Friday, so Monday was the first time the effects of the Brexit vote on market confidence in Sweden could be measured.
The result was an initial six percent decline, greater than the dip shown in many leading European exchanges at the start of this week. Trading at the Frankfurt exchange was down by 0.4 percent at the start of Monday for example, while trading in the London exchange fell by 0.3 percent during the same time.
By Monday lunchtime the Swedish exchange was still experiencing a five percent decline.
The drop was broad, and some of Sweden’s biggest international brands were hit badly. H&M’s shares were down by six percent at opening.
Banks felt some of the biggest effects. As midday approached, Swedbank shares were down by 7.1 percent, Handelsbanken by 8.9, and SEB by 9.
Swedish companies with major activity in the UK also took blows. Construction company Skanska saw shares drop 5.1 percent, while the value of shares in kitchen fitters Nobia, which makes over half of its sales in Great Britain, was down by 17 percent.
Peter Malmqvist, head analyst at brokerage Remium, said he was worried and highlighted how serious the speed at which ‘political chaos’ had occurred in the UK was.
“We are in a scenario where no-one knows how it will end,” he told news agency TT.
The currency exchange market has also been impacted by the results of the referendum. The British pound has plummeted to about 11.4 against the Swedish krona since Friday, ensuring sterling's lowest exchange rate to the Nordic currency since the autumn of 2014.
That is a long way off a year high of 12.61 kronor to a pound which was registered at the beginning of 2016.
Comments