WEEKLY UPDATE – Banks lead the fall on the Stockholm exchange Friday as investors fear that eurozone dept problems may choke economic growth.

• Swedish krona soars as the euro suffers
• Stocks dive as investors turn to gold

Stocks in Stockholm and across Europe declined Friday on speculation that fiscal actions in eurozone countries may choke economic growth. Asian shares and U.S. futures also fell.

The OMX Stockholm 30 closed down 2.51 percent Friday while the krona soured against the euro and sterling. Compared to last week the index was up 0.78 percent – boosted by Monday’s rally of 6 percent.

“I’m very worried about the debt crisis,” Dariusz Kowalczyk, Hong Kong-based chief investment strategist at SJS Markets, said in a Bloomberg Television interview. “There has to be further substantial fiscal consolidation in the most fiscally challenged euro countries, which implies that the whole region is quite likely to slip again into a recession.”

At the same time the Swedish krona was screaming higher as investors are pulling out of Europe's two biggest currencies, the euro and British sterling. The euro hovered near 14-month lows in Asian trade Friday on persistent concerns at Europe's economic woes.

"The euro area, like the U.K., ultimately faces a period of tighter fiscal policy and loose monetary policy, whereas the likes of Norway, Sweden and Switzerland are arguably heading towards tighter monetary policy, and they are not facing the urgent need to deal with budget deficits," Hardeep Dogra, a currencies investor at Schroders Investment Management in London, told Dow Jones.

The decline in Stockholm was lead by the banking sector. SEB dived 3.9 percent. On Friday morning the bank also confirmed onging talks with third parties regarding a divestment of its German Retail Banking business.

Nordea, Handelsbanken and Swedbank were also in the red.

Lundin Petrolium dived more than 7.1 percent Friday, after being up 5 percent Wednesday.

SSAB Svenskt Stål AB, the world’s largest supplier of high-tensile steel, dived 4.4 percent Friday after being downgraded by UBS.

Media firm Modern Times Group, MTG, swelled 2 percent after being upgraded by Handelsbanken Capital Markets. Its competitor Norwegian media group Schibsted said Wednesday it returned to profit in the first quarter as earnings was lifted by online media.

World stock markets fell Tuesday as Monday’s euphoria over a massive eurozone bailout gave way to doubt over countries' ability to reduce their deficits.

Since the turn of the year the OMX Stockholm 30 index is up 3.49 percent.

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