In Italy and Spain, the stock markets have risen by more than 10 percent so far this year. The Stockholm Stock Exchange's large-cap index and the New York Stock Exchange are not far behind, with gains of around 7–9 percent. Japan's Nikkei 225 index and South Korea's Kospi have surged 38 percent and 100 percent, respectively.
It has been a pretty good first half of the year, especially considering what has happened in the Middle East with war and rising oil prices, Maria Landeborn, senior strategist at Danske Bank, told TT.
Trading on the exchange was tentative during the first quarter of the year, but has picked up speed.
What usually happens when there is a major geopolitical event is that the market initially falls. But as you get a better overview, the market's focus usually shifts back to what the economic outlook is. It has looked pretty good this year anyway, with a stable economy.
So the market thinks the Iran war is overplayed?
Yes, and as energy prices fall and the price of oil moves downward, the risk of it having any major economic impact is decreasing, Landeborn says.
"Huge AI focus"
A clear theme so far this year is that the larger companies are stock market winners, especially in the technology sector.
There has been a huge focus on AI companies that have driven the stock markets in the US and Asia.
More and more investors and analysts are flocking to new technology companies rather than traditional consumer and industrial companies.
"There's been a lot of AI. Often it's one thing that's in the news at a time," Landeborn continues.
Gloomy in Denmark
The Copenhagen Stock Exchange's gloomy trading is going against the tide.
In Denmark, the pharmaceutical company Novo Nordisk is one of the largest companies on the exchange, and Novo has not had a great share price performance, Landeborn says.
So far this year, the Copenhagen Stock Exchange is down approximately 1.5 percent.
Novo Nordisk is down 5 percent, so it weighs down the entire index, Landeborn says.
How the stock markets perform in the future will depend on various factors. The Stockholm Stock Exchange is more sensitive to the economy, while the New York Stock Exchange is largely driven by corporate profits.
In the US, profits are expected to grow by 25 percent, which suggests the US can continue to do well. For the Stockholm Stock Exchange, what will be crucial is cyclical developments: that we see a recovery in Europe and that we do not experience inflation or other cyclical headwinds.
