WEEKLY UPDATE – Appetite for risk has taken a back seat.

• European equities dive on US economic woes
• Sweden dramatically hikes growth forecast

Swedish and European stocks dived on Friday as investors shunned risky assets after more weak US economic data dented confidence in the global recovery.

Chief economist David Rosenberg of Gluskin Sheff said in a Wall Street Journal interview that America’s economic hardship is far from over. "If you don't believe in a double-dip, it's because the first recession never ended", he said.

The OMX Stockholm 30 index closed down 1.90 percent Friday, as Wall Street stocks extended losses. Compared to a week ago the index was down 1.03 percent.

The total fund wealth of Swedish-registered funds dropped during the second quarter. The rising trend of the last four quarters was thus broken, the statistics office said.

Still, a clear majority of the Swedish companies posted better-than-expected second quarter profits and Henrik Degér, analyst at Handelsbanken, said the market was undervalued. More than 80 of 100 polled sales managers at Swedish listed companies believe that sales will increase during the rest of the year.

"The Swedish economy has shown an unexpectedly strong development", Finance Minister Anders Borg said Friday as he drastically raised the country's growth forecast.

Volvo, the world's second biggest truck maker, is placed to boost profitability after a wave of cost cuts, newspaper Dagens Industri wrote in an analysis Thursday.

"All in all, the Volvo group looks fit ... and the Volvo stock looks attractive for anybody expecting the overall economy to continue improving," the business daily said.

Electrolux was down 2 percent Thursday after US data said that shipments of the six biggest categories of white goods fell 1.6 percent percent last month.

Oil company PA Resources Thursday announces a oil discovery at Jenein Centre in Tunisia. The previous day its stock fell more than 4 percent after the firm slashed its production level prognosis.

Construction company NCC fell 4.5 percent Thursday after saying its profit fell 15 percent compared to a year ago, weighed by lower sales.

Scandinavian airline SAS climbed 3.1 percent Wednesday after posting lower-than-expected losses and positive cash flow from operating activities. Excluding the impact of the volcanic ash cloud that hit European airlines earlier in the year, it would have recorded earnings of 464 million kronor in the quarter.

A fund manager survey, conducted by BofA Merrill Lynch, showed a net 5 percent of respondents predicting that the global economy will improve in the next year. The survey also shows a sharp drop in investors' appetite for U.S. and Japanese equities, but a recovery in demand for Eurozone equities.

Since the turn of the year the OMX Stockholm 30 index is up 7.24 percent.

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

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