23 January 2008 04:50 [Source: ICIS news]
By Jeanne Lim
SINGAPORE (ICIS news)--Petrochemical stocks across the Asia-Pacific on Wednesday bounced back from a two-day meltdown as the US Federal Reserve’s move to cut interest rates boosted investor sentiment.
In a rare policy move outside of its ordinary meetings, the Federal Reserve cut interest rates by 75 basis points to 3.5% on Tuesday, its biggest cut in more than 23 years.
By lowering borrowing costs, such a move should help industry by boosting spending as well as lowering investment costs, and possibly stave off an ?xml:namespace>
Japanese chemical stocks jumped 2-6% as the Nikkei 225 index rose 3.4% to 12,994.32 points at 12:00 local hours (04:00 GMT) on Wednesday.
The share price of chemical major Asahi Kasei gained 5.4% while Mitsubishi Chemical and Mitsui Chemical stocks rose 2.6%.
The shares of Chinese state-owned refiners PetroChina and Sinopec soared 7% and 6% respectively as
The Standard & Poors/Australia Stock Exchange (ASX) 200 index jumped 4.11% to 5.399.90 points but the Stock Exchange of Thailand (SET) index could not recover from the past two days’ fall-out, dipping about 1%.
The stocks of SK Energy and Honam Petrochemical, however, recovered slightly by 0.8% and 1.8% respectively.
The Federal Reserve interest rate cuts could have boosted market sentiment in
“I think the interest cuts could not remove all the concerns of the market for the time being. Particularly in the first quarter, the stock market will maintain its weak trend,” he added.
Crude values, meanwhile, steadied above $89/bbl (€61/bbl) on Wednesday after the Federal Reserve’s interest rate cut halted a global financial market sell-off but failed to fully dispel fears of recession in the
Asian naphtha markets picked up a little on Wednesday morning, reversing yesterday’s crash, tracking the $3/bbl rebound in crude values.
Discussion levels for second half March naphtha cargoes were heard at $831-834/tonne CFR (cost and freight)
Some traders were, however, worried that if the
Prices fell by $38/tonne on Tuesday, following the stock market meltdown.
The Asian toluene market was quiet on Wednesday following the erosion of offers to $905/tonne FOB
However, traders anticipate prices to firm slightly on Wednesday on the back of stabilised crude values and modest overnight gains in the
A higher offer emerged mid morning at $920/tonne FOB (free on board)
But trade was scant as the
Meanwhile, a South Korean polyethylene terephthalate (PET) producer said that there had been no effect on prices so far on steadying crude values.
“Crude will impact on raw material one month later usually. Our deals have been concluded at lower prices because bid prices are decreasing. Demand is weak,” he said.
Another southeast Asia-based orthoxylene(OX) trader added that he didn’t think that the interest rate cut would have any impact on the market.
($1 = €0.68)
Helen Lee, Prema Viswanathan and Hong Chou Hui contributed to this article.
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