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FINANCE

Stockholm stock exchange suffers worst day of 2018

The Stockholm stock exchange plunged by 2.8 percent on Thursday, making it the worst trading day of 2018.

Stockholm stock exchange suffers worst day of 2018
File photo: Stina Stjernkvist/TT
Stock markets across Europe suffered for the third day in a row as the arrest of a top Huawei executive in Canada has raised the spectre of an all-out trade war between the US and China.
 
For the Stockholm Stock Exchange, it meant a blood-red trading day that ended as the worst of the year thus far. The OMXS Stockholm 30 index fell by a combined 2.8 percent.
 
The majority of the companies on the index lost value, with the exception of Ericsson, which seemed to benefit from the news about its Chinese competitor Huawei with a 1.8 percent increase. Airline SAS also saw its stock increase, rising 4.2 percent thanks to sharp declines in oil prices. 
 
Among Thursday’s biggest losers was the mining company Boliden, which suffered a 6.1 percent drop. The stock of the Stockholm-based tech company Hexagon fell 5.6 percent.
 
Meanwhile, the stock of Swedish auto safety equipment manufactor Autoliv fell 6.1 percent on the news that it expects to pay some 1.8 billion kronor in fines as a result of an European Commission investigation into anti-competitive behavior in the EU. 
 
Stockholm was far the only European bourse to have a gloomy Thursday. The CAC index in Paris fell 3.3 percent, the DAX index in Frankfurt dropped 3.5 percent and the London Stock Exchange's FTSE index decreased by 3.2 percent.

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FINANCE

‘Trump effect’ could knock Swedish house prices

The election of Donald Trump could lead to falling house prices in Sweden, according to some experts.

'Trump effect' could knock Swedish house prices
Photo: Fredrik Sandberg/TT
Swedish mortgage rates could soon rise on the back of rising market interest rates following the election of the populist Republican as the United States' next president.
 
Yields on Swedish ten-year government bonds have doubled in the past week, from 0.25 to 0.52 percent, in line with similar patterns around the world. The cost of bank-to-bank lending has also increased significantly, something that might have a knock-on effect on domestic lending, at least “to a small extent” according to Tor Borg, chief economist at Swedish state bank SBAB.
 
Claes Hemberg, economist at Avanza, said Swedes' high levels of mortgage debt made them vulnerable to rising interest rates:
 
“When today's borrowers are putting 20-25 percent of their incomes on mortgage interest, rising rates can quickly ruin what might look at first glance like the most solid of private financial situations.”
 
The changed circumstances follow Trump's pledge to massively increase infrastructure spending, leading many investors to shift investments from government bonds into the shares of companies likely to benefit from Trump's policies.
 
In Sweden, shares in property companies have fallen in the past week, with the property index in Stockholm falling five percent since Trump's election, despite the market as a whole rising. 
 
It's too early to say whether Sweden's private housing market has fallen, but even prior to Trump's victory the rises of recent years appeared to have reached a plateau. In October, prices of houses and apartments rose by 1 percent, but this was an exception to the recent pattern of stagnation.