Strong upturn on Oslo Stock Exchange

New rules requiring reporting of short sales, Distrust of Trump Oslo Stock ExchangeOslo Børs.Photographer: Stein Henningsen

From decline to strong upturn on the Oslo Stock Exchange

Tuesday’s sharp drop on the Oslo Stock Exchange (Oslo Børs) was reversed on Wednesday. The main index rose by 1.8 per cent to 798.91 points.

 

The upturn comes in the wake of the stock exchanges in both the US and Asia. After the first half an hour of trading, shares worth close to NOK 1.9 billion were traded. At the close of the stock exchange, the turnover ended at just below NOK 6.8 billion.

After several days of steep drop in stock values, especially in the US, the main index on the Oslo Stock Exchange dropped by 2.27 per cent on Tuesday, the biggest downturn since the summer of 2016. Wednesday’s growth was spearheaded by the Statoil stock, which increased by 4.61 per cent in value. The company early in the day published very healthy results and good news regarding the Johan Sverdrup field, which will be less expensive to expand than expected, and have larger oil reserves than previously estimated.

Only 13 companies on the main index went down in value, while heavyweights such as Telenor (up 1.25 per cent), Marine Harvest (3.74), DNB (1.25), Storebrand (1.20) and Aker BP (2.74) contributed positively. Other big players like Norsk Hydro and Norwegian where among the losers and lost 0.75 and 2.10 of their stock value by per cent, respectively.

Upturn in the United States of America

The leading European exchanges also had a good day on Wednesday. In Germany, the DAX 30 index increased by 1.54 per cent, the French CAC 40 by 1.60 per cent, while the FTSE 100 index in London rose by 1.88 per cent.

And when the morning trading started on the American financial markets on Wall Street on Wednesday afternoon CET, the arrows continued to point upwards both on the Dow Jones and the more comprehensive Standard & Poor’s 500. The technology heavy Nasdaq index however dropped slightly from start, not in the least as a result of the Microsoft stock shrinking by 1.2 per cent.

In Asia, Wednesday ended with smaller stock exchanges in many places. The Nikkei 225 in Tokyo, though it went up at the start, but eventually ended 2.3 per cent down. At the same level, the stock market in South Korea fared likewise. Shanghai and Hong Kong experienced a fall in equity as well.

fluctuations are not uncommon

Several analysts pour cold water in the veins of those who believe that the recent downturn is behind us. Expectations of US interest rate hikes probably triggered the drop on the New York Stock Exchanges before the weekend. Interest hikes are likely to increase the risk of continued drop in the stock markets, says chief economist in the Eika Group, Jan Ludvig Andreassen.

– There is nothing today that implies another stock exchange drop tomorrow. But the more you increase the interest rate, the greater is the risk, Andreassen tells NTB on Wednesday morning.

A sharp increase in the value of ten-year US Government bonds has recently led to a reduced the value of future cash flows, leading to lower pricing of stocks, says economist Ole André Kjennerud in DNB Markets. The Ten-year rate on US Government bonds are often referred to as “the world’s most important interest rate”.

– Although the turmoil now has big headlines worldwide, it is worth bearing in mind that it is by no means uncommon with fluctuations on the stock exchanges, Kjennerud reminds us.

Trump tweets

After keeping silent during Monday’s heavy stock exchange drop, President Donald Trump once again took the opportunity to tweet about the stock markets on Wednesday. Denne gang antydet han at uroen i aksjemarkedene rett og slett skyldes gode økonominyheter.

– When good news was reported in the” good old days”, the stock market used to go up. When good news is reported today, the stock market drops, Trump tweeted and added:

– Big mistake, and we have so much great news regarding the economy!

On Wednesday afternoon a barrel of Brent crude was traded at USD 66.6 on the spot market. The American light crude was sold at USD 62.8.

 

© NTB Scanpix / Norway Today

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