Europe chems shares mixed as FTSE 100 recovers

17 September 2008 12:45  [Source: ICIS news]

By Hilde Ovrebekk

Europe chems shares mixed as FTSE 100 recoversLONDON (ICIS news)--The FTSE 100 index of UK corporate stocks recovered slightly on Wednesday but performance from oil and chemicals companies was mixed.

At 10:16 GMT, the FTSE 100 had risen 1.37% to 5,094.70, after falling to a three-year low on Tuesday.

Shares in UK chemicals firm Johnson Matthey rose 2.42% to 1,356 pence at 10:04 GMT, after plunging 8.37% on Tuesday, while Shell's shares recovered slightly after dropping 4.5% to 1,605 pence.

However, shares in BP fell a further 3.76% after closing down 3.15% at 476.00 pence during the previous day’s trading.

The Dow Jones Eurostoxx 50 index also recovered to 3,112.72 points by 10:05 GMT after dropping 3.1% by the close on Tuesday.

Energy major Total's shares recovered slightly to €42.53, while BASF and Air Liquide stocks continued to fall. The former’s shares fell a further 1% on Wednesday to €34.85, while the latter was down another 1.2% to €81.81.

A key UK distributor said that banking giant Lehman Brothers' filing for bankruptcy protection had “frightened everyone stupid”.

“Whatever the product, it is dire,” the distributor said.

A European buyer of monopropylene glycol (MPG) said demand had already been slow this year due to the economic slowdown, and did not rule out that the current finanical crisis could have further effects on demand.

One MPG distributor said it was "an unsure market and customers are buying hand-to-mouth", adding that this was the case for other chemicals products as well.

However, another distributor said MPG demand was stable and had not seen an immediate negative impact from the current economic events.

Crude futures rose more than $3/bbl on the news of the $85bn (€60.35bn) US government rescue of global insurer American International Group (AIG) and a combination of militant attacks on oil facilities in Nigeria and disruption caused by Hurricane Ike, before easing off slightly.

October NYMEX crude was up $2.62/bbl at 11:00 GMT, while October Brent was at $91.65/bbl, up $2.43/bbl from the previous close.

In the financial services sector, shares in HBOS, owners of the UK’s biggest mortgage lender Halifax, recovered 3.96% to 189.20 pence by 10:28 GMT following reports it was in merger talks with Lloyds-TSB.

The company’s shares plunged more than 30% on Tuesday and slumped by another 50% when the FTSE 100 opened.

Barclays Capital, the investment banking division of Barclays Bank, said it had agreed to acquire substantially all of Lehman Brothers’ North American businesses and operating assets, including 10,000 employees, for a consideration consisting of assumed liabilities, $250m in cash and certain other terms and conditions.

Barclays also said it was in talks about similar takeovers of Lehamn's operations outside North America, but added that this was still early in the negotiation stages.

($1 = €0.71)

Jane Massingham and Heidi Finch contributed to this article
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By: Hilde Ovrebekk
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