Stocks rebound on EU crisis plan
May 10, 2010
After a terrible day on Friday, Monday was shaping up to be the best day so far this year for the Oslo Stock Exchange. Share prices jumped on news that finance ministers in the European Union (EU) had agreed on a plan to head off another financial crisis.
The main index of the Oslo Stock Exchange (OSE) was up nearly 6 percent by early afternoon, after a strong opening. Fully 51 of the 53 share issues making up the index registered gains.
“We haven’t seen such a strong upturn so far this year,” OSE spokeswoman Guro Stene told Norwegian Broadcasting (NRK). The rebound comes after the OSE fell nearly 3 percent on Friday, as nervous investors dumped stocks because of all the trouble in Greece and fear over southern European countries’ debt.
Other stock exchanges in Europe were also having a good day on Monday, up as much as 9 percent in some countries.
Several Norwegian analysts told newspaper Dagens Næringsliv (DN) on Monday, however, that the European debt worries aren’t the only reason investors have been selling off stocks and driving down prices. Many of the companies involved have reported disappointed sales during the first quarter.
A study by analyst Mathias von Ottenbreit at DnB NOR Markets showed that only two of the 24 largest companies on the OSE delivered better sales figures than analysts had expected.
Prospects for the Norwegian economy, though, remain generally good compared with other countries. Prime Minister Jens Stoltenberg expressed some concerns over the weekend, after the stock market declines on Friday, but told newspaper Aftenposten on Monday that he doesn’t fear another bank crisis. He noted that Norwegian banks are not heavily exposed to the EU countries now suffering the heaviest debt.
He hopes the EU economy and the value of the euro will recover, though, because Norway exports the majority of its goods and services to Europe, and wants the EU to maintain its purchasing power.