Norway’s Europe-Leading Stock Rally Goes Beyond Oil Heavyweights

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(Bloomberg) — Norway is developed Europe’s best-performing stock market this year, thanks to surging energy prices. But there’s more attracting investors to Oslo than just oil and gas.

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The OSE Benchmark Index has rallied 22% in 2026 and is within sight of its April record close. While giants in energy and defense have accelerated that outperformance during the Iran war, away from the main index there have been spectacular gains in areas like biotechnology and tech.

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Smartoptics Group ASA, for instance, has soared more than 80% this year as part of the global frenzy around photonics and AI infrastructure stocks. Circio Holding ASA, a developer of technology for gene and cell therapy, has surged more than 700% to be the biggest gainer in the Oslo All-Share Index. 

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Hywel Franklin, who co-manages Mirabaud Asset Management’s Discovery Europe ex-UK fund, said higher energy prices naturally support growth in Norway’s economy as well as in some key sectors. But “there are also very innovative areas,” he said in an interview.

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Franklin’s roughly $322 million fund has returned 31% over the past year, beating 99% of peers, according to data compiled by Bloomberg. The performance has been helped by the fund’s geographical allocation to Norway, which exceeded 13% at the end of April, according to the latest monthly factsheet. 

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His fund holds Smartoptics, which he predicted will benefit from the growing need for interconnection between artificial intelligence data centers. Another Norwegian holding is circuit board producer Kitron ASA, which Franklin said has “good exposure to the growth coming through in defense,” and is up 50% in 2026.

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In a nod to the important role of oil and gas in the Norwegian market, Franklin also holds geophysical consulting and services firm TGS ASA. Analysts at Goldman Sachs Group Inc. last month initiated coverage on the stock with a buy rating, saying the company is well-placed to benefit from an upswing in oil exploration.

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Gains for the OSE Benchmark Index are comfortably ahead of any other developed market in Europe. They beat the 5% advance by the FTSE 100 in London this year, while Frankfurt’s DAX is up 1% and the CAC 40 has dropped 0.4% in Paris. 

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“It’s a slightly unusual composition that has meant that the index is weighted towards the sectors that benefit from the war in the Middle East and the consequences of that,” Paul Harper, equity market strategist at DNB Carnegie, said in an interview. “There’s a lot of energy, materials — and also shipping, which is a sector which normally is off the radar for most markets.”

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The outlook for the Norwegian benchmark will depend largely on what happens to energy prices in the months to come. 

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“From a valuation point of view, it’s not looking particularly attractive unless you think the oil price is going to continue rising from here,” Harper said. “It would require an incremental upside in earnings to drive the index further.” 

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—With assistance from Jonas Ekblom and Julius Domoney.

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