Helsinki Stock Exchange hits a millennium-high record – earnings season beat even the optimists, but factories and municipalities tell a different story
The Helsinki Stock Exchange general index has this week pushed to levels not seen since the turn of the millennium. Investors are celebrating – but on the same country's factory floors it has been quieter than in a long time. Why are these two indicators of the economy now pointing in opposite directions, and what does that mean for an ordinary Finn?
Earnings season beat the optimists
A quick recap: an earnings season is the period during which listed companies publish their numbers from the previous quarter. For investors it is the most reliable window into the economy, because it shows what companies actually earn – not just what they project.
Before this spring's earnings season began, OP Pohjola estimated early-year earnings growth at 5–6 percent. The reality has been considerably better: the combined operating profit of listed companies has risen by roughly 10 percent year-on-year. In OP's updated forecast, second-quarter earnings growth could reach as high as 27.5 percent and full-year growth 16 percent.
That is a big number. When the profits of listed companies grow, their share prices rise – and when many shares rise at once, the index sets new records. That is exactly what is happening now.
Nokia and Neste lead – Tokmanni was the loser
The biggest positive surprises have come from Nokia and Neste. Nokia's network equipment business is benefiting from worldwide AI and data center investment, while Neste is being lifted by fuel prices that have been pushed up by the Middle East crisis. When oil and refining margins climb, a refiner's cash position grows quickly.
Among smaller companies, Witted Megacorp jumped more than 20 percent in a single day after its results – a clear sign of how sharply investors react to a positive surprise.
There were disappointments too. The discount chain Tokmanni saw its loss deepen against expectations. Tokmanni is a good example of how, even when things look good at the index level, consumer purchasing power may not be enough to keep a discount chain profitable. When people tighten their belts, they often shift to cheaper stores – but if that shift fails to materialize or basket sizes shrink, even Tokmanni cannot escape.
The macro backdrop helps: inflation slowing, rates steady
The market rally is also supported by a stable rate environment. The three-month Euribor – the reference rate to which most Finnish mortgages are tied – is hovering around 2 percent. Market expectations are that the ECB deposit rate and Euribor will remain at this level through 2026–2027.
Inflation slowed in May to 1.5 percent (from 1.9 percent in April). The slowdown was driven, among other things, by mortgage and consumer credit rates no longer rising at the same pace as before. Stable rates and moderate inflation are the ideal climate for investors: companies' financing costs stay in check, and consumers' purchasing power is not eroded.
But – the real economy tells a different story
Here comes the contrast worth keeping in mind before the stock market records start to feel like an all-Finland success story.
A recent review by the Industrial Union notes that mass unemployment continues and that economic setbacks are visible particularly in export industries. Forecasts from the Ministry of Finance and the Bank of Finland put full-year 2026 GDP growth at just 0.6 percent – modest, given the recession that preceded it. Growth of 1.4 percent is forecast for 2027.
Another real-economy indicator is the building stock. A recent Kauppalehti investigation reveals that Finnish municipalities will demolish a record number of public buildings this year: schools, health centers, government offices. The reason is simply that municipal finances cannot bear the cost of paying down repair backlogs. The wrecking ball wins over renovation.
Why are the stock market and everyday life no longer in step?
The gap arises because the earnings of listed companies are no longer as tied to the Finnish domestic market as they were in the 1990s. Nokia sells networks worldwide, Neste sells fuel on global markets, and many of the most important companies on the Helsinki exchange earn the majority of their revenue abroad. When the world economy is firing – particularly the US AI boom and the Middle East fuel market – Finnish companies' results improve without Finnish consumers spending one euro more.
Meanwhile, the Finnish real economy still leans on construction, consumer behaviour and public sector investment. When these falter, unemployment rises and municipalities save – regardless of what the Helsinki index does.
What should the reader take from this?
Investors can rejoice: the earnings season has shown that this rally is not just sentiment but is also backed by real numbers. But records are not the same as the general state of Finland's economy. A stable rate environment and slowing inflation give breathing room to mortgage borrowers, while unemployment and municipal cost pressures show that the floor of the economy is still thin.
The next key dates are the Q2 results in July and August. If OP's forecast 27.5 percent earnings growth materializes, the rally could continue – but if global momentum weakens, records can quickly turn into declines. On the real-economy side, the question is whether unemployment will finally turn and whether municipal finances can be brought back into balance before the repair backlog grows untenable.
The coexistence of two different Finlands, in other words, looks set to continue at least through the summer.
Sources: Kauppalehti, Bank of Finland (Euro & Economy), Statistics Finland, Industrial Union, Ministry of Finance.