STOCK MARKET – It’s been a murky week at the Stockholm exchange as H&M; posted disappointing figures and sales of homes in the US unexpectedly slumped.

“It’s been a gloomy week”, Esbjörn Lundevall, Head of Equity Research at SEB Private Banking, told The Swedish Wire. "We are clearly in the red".

On Friday midday trading the OMX Stockholm 30 index was down more than 2.50 percent compared to a week ago.

Swedish banks Swedbank, Nordea and SEB fell during the week as US statistics showed that sales of existing homes unexpectedly slumped and Federal Reserve said it would shrink emergency programs meant to bolster credit markets.

“This is the first time in a long while that figures were surprisingly weak instead of surprisingly strong”, Esbjörn Lundevall said, explaining that it’s been a noticeable upward trend at the American housing market since spring.

“This is the second month in a row with falling median prices. The market reacted heavily on this as stable or rising house prices is seen as the key factor to get the American bank sector back on its feet”.

The same day Norway’s largest bank, DnB NOR, said it would raise 14 billion kroner ($2.41 billion) in a guaranteed rights issue to strengthen its core capital. The move didn’t come as a surprise but was seen as healthy sign as it will increase the bank’s financial robustness. The bank jumped 6.6 percent on the Oslo exchange.

Clothing retail giant H&M; fell heavily on Thursday after positing better-than-expected profit but said total sale in august fell 3 percent year-on-year – versus a forecast for a 5 percent rise.

“The result was better than expected, margins impressive but sales in August the weakest in a long time. H&M; also indicated that September will be bad”, Esbjörn Lundevall said.

Sweden's centre-right government presented on Monday an expansive 2010 budget bill focused on job creation and economic stimulus to lift Sweden out of the crisis a year ahead of general elections.

In an interview with The Swedish Wire on Monday London-based analysts warned that a "double dip" may hit Sweden, potentially affecting stock markets.

“Well I am very much a W man and not a V man,” commented David Buik, strategist at BGC Partners in London. “I think people underestimated something that is enormous and that is that unemployment is still going up”.

This article has been published at The Swedish Wire and Nasdaq OMX Nordic.