WEEKLY UPDATE – Contradictory US data lead to volatile trading.

Contradictory US data lead to volatile trading on Friday. US retail sales fell unexpectedly in May, signalling that the economy remains fragile. But other figures showed that confidence among the consumers rose in June to the highest level in more than two years.

The OMX Stockholm 30 index closed down 0.14 percent. Compared to last week stock in Stockholm were up 1.03 percent.

The overall picture of the Swedish economy is looking brighter, the statistics office said Friday as it presented its sum-up of the economy.

But Swedbank’s chief economist Cecilia Hermansson told The Swedish Wire that the country’s export dependent economy may face challenges as governments on the most important export markets tighten expenditure to fight debt crisis.

“Sweden’s export companies are facing large difficulties next year”, she said, adding that Sweden has a considerably better situation than many other European countries.

Analysts said that the disappointing US retail sales did not indicate that the country was falling back into recession.

"The report is not evidence that the economy is getting ready for a double-dip or that consumers, facing headwinds of double-digit unemployment and bank credit restriction, are taking their ball and going home," Chris Rupkey, chief financial economist at Bank of Tokyo/Mitsubishi in New York, told Reuters.

Friday's sell-off followed Thursday's strong gains boosted by upbeat Chinese export figures and US job data, making the Stockholm index swell more than 2 percent. Swedbank rose more than 5 percent. SEB’s chief executive officer Annika Falkengren told business daily Dagens Industri on Thursday that there are at least three parties interested in buying the Swedish bank's German retail network.

The price of shares in the world's top mobile phone maker Nokia fell to the lowest level since March 2009 on Wednesday amid market rumours that the company might issue a profit warning.

Shares in Swedish investment bank HQ Bank dived 30 percent Tuesday after the troubled firm announced new costs connected to its bleeding trading operations and a surprise sell-off of its fund unit.
"Clearly trading losses have been larger than what the bank first said", Nordea Markets analyst Maths Liljedahl told the Dagens Industri website. "This is serious".

The same day Swedish-Swiss engineering group ABB, the world’s biggest maker of power grids, rose almost 1 percent after announcing a 860-million-pounds ($1.24 billion) all-cash offerto acquire UK-based Chloride Group Plc. The company stock was also upgraded by Goldman Sachs.

Oil firm Lundin Petroleum registered a modest decline Tuesday, the same day as a report said that a consortium led by Lundin Petroleum was partly to blame for war crimes committed in Sudan between 1997 and 2003.

Since the turn of the year the OMX Stockholm 30 index is up 6.78 percent.

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