Oil prices and the Oslo Stock Exchange both fell quickly after real estate investor and showman Donald J Trump emerged as the new US President-elect on Wednesday. Both recovered, though, and analysts were brightening gloomy prospects that Trump’s victory would hit markets hard.
Shares traded on the Oslo Stock Exchange lost so much value in early trading that the exchange’s index was down 3 percent at the opening. By 11am, though, it had recovered most of its losses and was almost back on the plus side, down just 0.2 percent.
“The finance markets have clearly calmed down during the morning hours,” Olav Chen, senior portfolio analyst at Storebrand Asset Management in Oslo, told financial and business news site DN.no at midday. Norwegian investor Morten Astrup credited Trump’s conciliatory and unifying victory speech, delivered just as the workday was beginning in Europe and in the afternoon in Asia, with calming skittish markets.
Astrup, chief for the fund manager Storm Capital in London, noted how Trump stressed cooperation and reconciliation and even thanked his arch-rival Hillary Clinton for her hard work “and service to our country” for many years. “And I mean that very seriously,” Trump said, after a bitter campaign during which he repeatedly called Clinton “corrupt” and memorably described her as “such a nasty woman.” On Wednesday, after winning the election and accepting Clinton’s call conceding defeat, he even told his followers that “we owe her a major debt of gratitude” and he congratulated both Clinton and her family for their hard work during the campaign itself. He clearly no longer believed that the entire election system was “rigged,” as he’d claimed earlier.
Investor Astrup, for one, said he hadn’t made any changes in Storm Capital’s portfolio before the US election. He called the early market unrest tied to the Trump victory a result of “noise” and told DN that “we think the fear will ease its grip relatively quickly.”
The Norwegian krone was also steady against the US dollar, at NOK 8.25, having weakened slightly on Monday and Tuesday. Oil prices also rebounded after falling to just over USD 45. By noontime, the price of a barrel of Norway’s North Sea Brent crude oil was back up at USD 46.18.
Uncertainty continued to swirl around many key issues involving trade and defense, both of which can affect oil prices and the financial markets. Torbjørn Kjus, an oil analyst at DNB Markets, said he was actually surprised that oil prices didn’t dive deeper on Wednesday. He thinks they now may rise quite a bit.
Kjus thinks the policies of Trump’s Republican Party generally have a positive effect on oil prices because they can boost consumption and demand. “A harder line from the US against Iran can also contribute to raise oil prices,” Kjus told DN, while an increase in US production can have the opposite effect. He predicted an oil price of nearly USD 55 by late December.
Norwegian politicians, however, were mostly surprised by the Trump victory, cautious and even worried about its effects. While Prime Minister Erna Solberg of the Conservatives chose to stress Trump’s new attempt at reconciliation and cooperation, her rival Labour Party leader Jonas Gahr Støre called the victory “a protest vote” and linked it to “social problems” and “dissatisfaction” in the US. Commenting on Norwegian Broadcasting (NRK) before Trump changed his harsh tone and urged unity in his victory speech, Støre noted how there were many “sores” that would need to be healed after the bitter campaign. “We have our alliances, though, and we must take good care of Norwegian interests now,” Støre told NRK.
Trine Skei Grande, leader of the Liberal Party that supports Solberg’s government coalition with the Progress Party, seemed to be crying in her coffee during a breakfast interview with NRK at her home. “We really don’t know what he stands for, whether he’ll stand up for Norway,” Grande told NRK, denouncing his campaign suggestions of a “Chinese conspiracy” and how he intended to boost protectionism. “Will relations change? Will there be a different cooperation between us,” mused Grande, who had openly supported Hillary Clinton. “We don’t know.”
newsinenglish.no/Nina Berglund
