WEEKLY UPDATE – Shares in Sweden dived despite a majority of the listed companies posted surprisingly strong earnings.

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Shares in Stockholm fell Friday after pressure by stalled eurozone recovery, flat economic growth in Germany and Chinese measures to cool down its fast-growing economy. The OMX Stockholm 30 index declined 1.30 percent and was down 1.80 percent compared to a week ago.

Still, some two-thirds of the Swedish companies have posted better than expected fourth-quarter earnings, according to a sum-up by independent stock market analyst Peter Malmqvist. Profits are in average 14 percent lower than in the same quarter 2008, which is considerably better than during previous quarters last year; third-quarter earnings were 35 percent lower and second-quarter earnings almost 60 lower than the same period a year earlier.

“The trend is clearly on the rise. Profits are increasing, mainly on the back of lower costs”, Peter Malmqvist told The Swedish Wire. “Stock prices are likely to keep increasing”.

Since the turn of the year the OMX Stockholm 30 index is down 2.15 percent. Peter Malmqvist forecast a 20 percent rise this year.

Defence firm Saab, maker of the Gripen fighter jet, fell almost 10 percent Friday after posting lower profit and sales than expected. Also the world’s largest lockmaker Assa Abloy and Europe’s second-largest zinc producer Boliden fell after disappointing figures.

Troubled Scandinavian airline SAS shares closed down 28 percent Tuesday after it begged its owners for more money in a 5-billion-kronor rights issue. The airline’s fourth quarter operating loss fourfold to 1,5 billion kronor

The Nordic region's biggest bank, Nordea, dived Wednesday as it said that loan losses will remain on a high level this year and failed to meet profit forecast. Skandinaviska Enskilda Banken, Sweden's third-biggest banks, struck a cheerful tone as asset quality in the Baltics are improving. Swedbank said it might swing back into profit this year.

Sweden’s krona surged Thursday to the strongest in almost 15 months against the euro after the Riksbank said it would keep its key interest rate at record low 0.25 percent. The price of a euro is now below 10 kronor. The central bank is likely to hike the interest this summer.