Could the OMX Stockholm 30 (INDEX: ^OMX) notch another week of gains after Nokia's (NYSE:NOK) big deal with Microsoft helped push it up last week? In short: yes.
The week ended on a somewhat somber note for Sweden as the initial estimate for GDP contraction during the second quarter was revised up to 0.2%. The economic drop was driven by lower fixed capital investments and exports. If there was a bright spot, it was that household consumption still climbed 1.9% during the quarter.
But if the economic news was sour, somebody forgot to tell that to the main market index as the OMX Stockholm 30 rose 1.4% for the week. Once again, Nokia was the index's biggest gainer, tacking on 15%. Investors unsure what the company will look like now that it's sold the mobile division to Microsoft are apparently getting more comfortable with the outlook for the future.
Ericsson (NASDAQ:ERIC), meanwhile, which benefited from Nokia's stock market tailwind last week, saw its stock on the rise again this week, tacking on nearly 3%. On Thursday, the company found itself on the right side of a Goldman Sachs thumbs up as the investment bank added Ericsson to its "conviction buy" list.
Industrial equipment giant Atlas Copco AB was also among the index's big gainers as it added 4.5%. After the big bite that Atlas made last month when it acquired Edwards Group (UNKNOWN:EVAC.DL), the company showed this week that it will keep right on growing -- albeit in smaller increments for now.
Atlas announced two acquisitions this week. On Monday, it announced the purchase of the 16-employee Turkish compressor sales and services company Dost Kompresor. Atlas followed up on Tuesday by buying U.S.-based Pneumatic Holdings, a provider of construction tools.
To cap a positive week, Atlas was once again named part of the Dow Jones Sustainability Index. This is another feather in the cap of a company that's been widely recognized for its sustainability efforts. Earlier this year, Atlas was honored as one of the world's most ethical companies by Ethisphere.
The Nomura knockdown
Though most of the stocks in Sweden's key index were in the black for the week, steelmaker SSAB AB was well in the red. Even with the stock down double digits year to date, the analysts at Nomura decided that it was still a bit too rich for their taste and downgraded the shares from "neutral" to "reduce."
Per Bloomberg, Nomura wrote to clients that:
Not only does SSAB require one of the largest earnings recoveries in 2014 to sustain its current valuation, it will have a relatively limited impact from its cost-saving program -- completed in the first quarter 2013 -- and will no longer benefit from below-spot iron ore prices, as it has done in the first half 2013.
According to Nomura, the stock's current valuation of 10 times forward earnings estimates is above the eight-times multiple on other companies in the industry.