Stocks dive over Greek tragedy
May 7, 2010
UPDATED: Norway’s oil fund has grown but the Oslo Stock Exchange (OSE) wasn’t spared on Friday from a major stock market dive, as nervous investors sold off shares in another spate of panic over the Greek debt crisis. Even though Norway’s economy remains relatively strong, Norwegian share values tumbled.
The OSE share values fell 1.87 percent at the open, after a dramatic day of trading on US stock exchanges Thursday and more heavy declines during the night in Asia. As the day progressed, the OSE index fell as much as 4 percent.
The day ended with the Norwegian market down 2.9 percent, making Friday the worst trading day so far this year. Some of the Oslo exchange’s biggest issues suffered the most, with Norsk Hydro diving 7.7 percent, insurer Storebrand down 7.2 percent and Royal Caribbean Cruises off 6.4 percent.
One trader in Tokyo told Bloomberg News that investors were selling “in panic,” but he thought they’d return when the problems in Greece begin to subside. Concerns over heavy public debt in Spain and Portugal also have sent stock markets down.
At the same time, Norway’s huge pension fund fueled by oil revenues reported assets of NOK 2,763 billion and strong returns in the first quarter. The so-called “oil fund” earned NOK 103 billion in the first quarter, up 3.9 percent, according to financial news service dn.no.
The fund has exposure to the debt crisis in southern Europe, but not as much as might have been expected, and fund managers say they’re now sitting tight in the middle of the financial storm. Oil fund chief Yngve Slyngstad conceded that he’s worried about “the serious situation,” noting that debt has risen to a level “we haven’t seen earlier in the world’s history.”
Norway’s ambassador to Greece, meanwhile, was also riding out the storm in Athens and told newspaper Dagsavisen that most of the violence in recent demonstrations has been caused by communist and anarchist groups.
Many Norwegians spend their holidays in Greece, and few were booking new trips. The situation on the islands, however, was said to be calm and there were no official advisories against travel to Greece.