The main index in the Oslo Stock Exchange rose 1.7 percent on Tuesday, and thus continued to rise from Monday.
Thus, the stock market here at home is different from other European markets, thanks in part to the fact that the price of oil is up nearly seven percent to about $105 a barrel.
Equinor is also benefiting from a strong oil price on Tuesday – the stock rose 7.6 percent to a new historic high of 299.55 crowns, giving the company a market value of 975.8 billion crowns.
– Increased volatility
Investment director Gaute Eie at Eika Kapitalforvaltning now lays out the investment strategy with Eika managers, then draws on the history books. The conclusion is simple:
– totally awesome. Stock market charts from previous wars—looking back to 1926 and even conflicts like Crimea, the Gulf War, and the Iraq War—show that stock markets rallied in most cases during the invasions and in the period that followed. . E says that the bottom of the stock exchanges was historically at the time of the invasion itself.
He adds that usually in the run-up to war actions, when concerns are mounting, stock markets may be turbulent.
– But the current situation in the stock exchanges is somewhat different from the previous ones when we exit the bull market at that time. We’ve also seen 7 percent inflation in the US and a serious energy crisis, says E.
Eie notes that volatility has increased, but it has now been given some sort of overview.
– I myself am a fund agent, and I keep these records, says E, who assures that “what is happening now in Ukraine is tragic.”
He points to Storebrand’s participation as an indicator of the wonderful mood of the world. Having risen in line with growing global prosperity and expectations of higher interest rates for a decade, the share price is now down nearly 12 per cent from a high of over NOK 99 two weeks ago.
In the fall, Storebrand’s share followed expectations that global economic growth will slow as a result of the crisis in Ukraine, and that it will, in turn, affect growth in the United States and thus limit interest rate increases. Storebrand stock is now trading at just over NOK 86.
Energy winds spin again
Norway is in a slightly different situation than feared. Oil and energy prices are on the rise, and with aluminum at $3,400 a tonne, Hydro is earning 11-12 NOK per share, says Eie.
Earlier this winter, the average estimate among analysts was that Norsk Hydro would earn NOK 9 per share. On Tuesday, Norsk Hydro’s share price continued its winter rally, and the stock is trading at less than NOK 86. On the other hand, on Tuesday, some of the renewable coolers in recent days will be shut down again, as Nel’s share is down seven percent.
Over the past three days, Nel’s price has gone up 32 percent, something Eie calls simply “crazy.”
– The winds of energy seemed to have reversed with the increase in the war in Ukraine. There has always been an understanding that more energy sources will need to be invested if Europe is to be able to replace Russian supplies, but after the invasion, the market again gained increasing confidence in wind and solar power. The hydrogen sector will also receive more attention.
Stock investors nearly lost faith in Nel, Quantafuel, Ørsted and Vestas and their stock prices fell for about a year. Among other things, this is due to “a very weak development in new sales and profitability,” according to Eie.
He believes that the interest in renewables signals a strong change in mood, as renewable energy was very unpopular until the outbreak of the Ukraine crisis last week.
Plus, there may have been some short coverage which means these stocks rose sharply from Thursday to Monday, says Eie.
Heavy Monday in the United States
All of the major indices on the New York Stock Exchange collapsed on Monday, and only the Nasdaq ended up with more.
US markets, the Nasdaq and the New York Stock Exchange, have decided to temporarily stop trading in shares in Russia-based companies, they reported on Monday.
The suspensions are attributed to regulatory concerns, as exchanges seek more information in light of the economic sanctions that have been imposed on Russia in recent days.
The Biden administration announced further sanctions against the Russian Central Bank on Monday, she wrote CNBC.
The new sanctions prevent Americans from doing business that involves transactions with the bank. In addition, Americans are freezing bank funds in the United States.
Moscow is closed
Major Asian indices started higher on Tuesday after great uncertainty and mixed development on Monday – similar to what happened also later today in Europe and the US. The Nikkei index on the Tokyo Stock Exchange is up nearly 2%.
The Russian Central Bank confirmed Monday evening that the Moscow Stock Exchange will also be closed for trading on Tuesday. The authorities tried to prevent the financial collapse and the flight of investors from Russian securities.
The Russian ruble collapsed against foreign currencies. The central bank responded on Monday by more than doubling the key interest rate to 20 percent. MSCI, which manages a number of stock indices, is considering removing Russia from the indices. This will cause investors to flee from equity funds.(Terms)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using a link that leads directly to our pages. All or part of the Content may not be copied or otherwise used with written permission or as permitted by law. For additional terms look here.
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