Stockholm stock market falls nearly 10 percent in March

The Stockholm stock market has fallen nearly 10 percent in one month, making March the worst month since the pandemic. The closure of the Strait of Hormuz is determining how long the situation will last, according to Nordea chief economist Annika Winsth. When Israel and the US attacked Iran, the stock market was at record-high levels.

A sharp rise and high expectations followed by a dramatic event may explain why people have taken an economic step back and the stock market is falling, according to Robert Bergqvist. There is a serious situation in the Middle East with possible consequences for the global economy, says Robert Bergqvist, senior economist at SEB. The challenge now is the Trump administration's misjudgment regarding Iran, according to Annika Winsth.

What was supposed to be a quick operation has dragged on, and the closure of the Strait of Hormuz has had major consequences. It constitutes a risk that banks want to be paid for, which is why banks are raising interest rates. The closure of the Strait of Hormuz is what causes the machinery to stop, much higher prices, and it determines how long we will be in this situation, says Annika Winsth, chief economist at Nordea.

If peace were to come in the near future, Winsth believes the economy will recover quickly and we will look back on this as a small blip in the curve. But if this continues through May and the Strait of Hormuz remains closed, there is a risk of follow-up effects such as central banks raising interest rates, she says. The Stockholm stock market is also performing worse than the Nordic neighboring countries now.

Robert Bergqvist explains this by saying that Swedish companies span many industries and are exposed to a global market. But over a longer period, I could imagine that the Stockholm stock market might perform stronger, says Bergqvist.