The OMX Stockholm index is at year-high and is expected to keep swelling, analysts say.

Looking at company earnings posted during the current reporting season makes you almost forget that Sweden and the world is struggling with the worst economic crisis since the Great Depression. More than three-forth of the listed companies have posted better-than-expected earnings; making this season the most surprisingly upbeat in five years.

On Wednesday the OMX Stockholm index closed at year-high and at Friday midday trading the index was up 2.5 percent compared to last week. Positive global signals and increased risk appetite will push stock prices further up, analysts say.

“We have not reached the top. The increase on the market will, according to my expectations, continue even next year as earnings outperform expectations and economic forecasts are revised upwards”, Martin Guri, equity strategist at Nordea, told The Swedish Wire.

He expects the OMX Stockholm index to rally during the last months of this year on the back of rising economic optimism and strong Christmas shopping.

Outcome from the G20 meeting last weekend, stating that global economic conditions have improved, boosted Swedish and global stocks. Stocks also jumped Wednesday as China’s industrial production and trade surplus climbed in October, indicating a strengthening recovery in the world’s third-largest economy, and Japan’s machinery orders increased.

“You got people out there saying the bear market rally’s over,” Jeffrey Saut, chief investment strategist at Raymond James & Associates, told Bloomberg. “I think they’re smoking dope.”

Also Sweden’s Finance Minister Anders Borg struck a cheerful tone about the country’s economic growth, saying that he expected Sweden to be one of the first countries to recover fully from the global economic downturn. The economy is expected to shrink by 4.9 percent this year compared to a previous forecast of 5.2 percent.

"Sweden has landed on its feet after the financial crisis", he said. “But if we are able to maintain stability, we need to continue with the expansive economic policy which we have now”.

Morphic Technologies, operating in the areas of fuel cells and wind power, mysteriously rallied 90 percent on Wednesday. The company is in a silent period and won’t post its earnings until two weeks.

Oil company Lundin Petroleum posted slightly stronger earnings than expected while Securitas, the world’s largest guarding company, fell after posting lower revenue than expected.

Swedish telecom operator TeliaSonera gained almost 7 percent Thursday. After a long-drawn legal dispute TeliaSonera and Russian Altimo agreed to fold their stakes in Turkcell and MegaFon into a new company that will be listed on the New York Stock Exchange.

Moody's on Friday downgraded airline SAS' credit rating one step with negative outlook, mainly because of the weakening development in earnings due to increased yield pressure in the market.

Since the turn of the year OMX Stockholm 30 is up 46.15 percent.

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