Stockholm's stock exchange opened the week with sharp declines due to rising oil and gas prices from the escalating Middle East conflict. The OMXS index fell 1.7 percent at close, wiping out the year's earlier gains. Experts warn of potential impacts on Stockholm's housing market.
One week into the conflict between Israel, the US, and Iran, oil and gas prices have risen sharply, unsettling the global economy. The price of a barrel of North Sea oil passed 100 dollars overnight to Monday, the highest level since the inflation summer of 2022. This echoes the situation after Russia's invasion of Ukraine, when inflation in Sweden rose above 10 percent in less than a year.
Stockholm's stock exchange was hit hard. The broad OMXS index fell 1.7 percent at close, in line with European markets and early Wall Street trading. Earlier this year, the market had reached gains of up to seven percent, but Monday's drop of two to three percent in the opening erased the entire year's profits. "We have had a strong start to the stock market year. But with declines during the morning, the entire year's stock market rise has been erased," says Maria Landeborn, senior strategist at Danske Bank.
SVT economic commentator Alexander Norén notes that the decline was expected due to a series of negative news piling up over the weekend. Unlike 2022, the gas shortage is not as acute, and the global economy is more balanced post-pandemic. Still, uncertainty around inflation and interest rates is growing, particularly in the US where Donald Trump is pushing for lower rates despite persistent inflation.
On Stockholm's housing market, which often sets the trend for the rest of the country, risks exist. "There is a risk that prices either fall back or that the price increase many expect this year fails to materialize," warns Maria Landeborn. Experts emphasize that today's energy crisis is not of the same magnitude as 2022, but uncontrolled price increases can spread through the economy and erode household and business costs.
