The Danish C25 stock index fell by around 1.3 percent on Monday morning. According to Philip Jagd, head of equities at Sampension, the decline should be seen in light of rising oil prices.
- The situation in the Middle East has had a major impact on not only the oil price, but also gas and fertilizer prices and of course the stock markets in the past week, he says in a written comment.
- In the same way, we must expect that news about the conflict and energy prices will continue to swing the baton across the financial markets in the coming time.
The index consists of the 25 most traded shares on the Copenhagen Stock Exchange measured by turnover and includes companies such as Mærsk, Ørsted and DSV. Shortly before 10:30, all three companies are among those hardest hit. They fall between 2.3 and 3.1 percent.
Recent days have been marked by unrest in the Middle East, after Israel and the United States launched a comprehensive attack on Iran on February 28. The attacks have since been responded to.
In continuation of the conflict, several oil-producing countries in the region have limited their production of oil. This has happened after the important Strait of Hormuz has been closed.
The location of the strait between the Persian Gulf and the Gulf of Oman makes it an important trade hub. Around 20 percent of the world's oil passes through the Strait of Hormuz. Increases in oil prices can affect most parts of the world community, including the Danish one.
If the price remains high, it could mean higher production costs for companies in the long term and ultimately lower earnings.
No sign of improvement
Lukas Lausen, head of global trade and investments at the Confederation of Danish Industry, sees no signs that the situation will stabilize for the time being.
- On the contrary, there is much to suggest that the conflict will continue and possibly intensify further, which means that the closure of the Strait of Hormuz will likely be maintained in the near future, he says.
- If so, it will put further pressure on fuel prices with direct consequences for both consumers and the business community.
/ritzau/
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