UpdateEurope chem stocks rebound amid volatility

07 October 2008 17:38  [Source: ICIS news]

(Releads and updates throughout)

 

By Mark Watts and Hilde Ovrebekk

 

LONDON (ICIS news)--Stocks in European chemicals companies saw a slight recovery on Tuesday after suffering heavy losses the previous day, despite banking shares continuing a sharp decline.

 

Speciality chemicals players Wacker Chemie, Rhodia and Lanxess, which lost over 10% in value during Monday’s crash, all booked modest recoveries, while the Dow Jones Eurostoxx Chemicals index rose 1.13%.

 

Wacker Chemie’s share price, which plunged 19.23% on Monday, was up 8.5% at €86.32 in late afternoon trading. Rhodia’s stock was up 5.65% at €9.53 after falling 11.5%, while Lanxess shares recovered by just 2.13% to €16.75 following a 10.04% drop the previous day.

 

The UK’s FTSE 100 index recovered 1.19% after it fell 7.9% on Monday to a four-year low. Shares in UK oil major BP climbed 3.55% to 445 pence, while oil and chemicals firm Shell’s shares were 3.26% higher at 1,551 pence.

 

The UK's largest listed chemicals firm Johnson Matthey’s stock fell nearly 2% to 1,151 pence.

 

Germany’s DAX index lost 0.2% on Tuesday continuing the downwards trend after falling by 8.18% on Monday.

 

German chemicals major BASF’s shares dropped 0.44% to €31.56 after falling 4.69% on Tuesday, while Bayer recovered by a modest 0.34% at €50 ($68) after a 3.78% loss.

 

EU finance ministers agreed to increase the guarantee for customers’ bank savings accounts to at least €50,000 during a meeting in Luxembourg.

 

The British Chambers of Commerce (BCC) warned on Tuesday that Britain was already in recession and could face a prolonged downturn.

 

British Prime Minister Gordon Brown was expected to meet Bank of England Governor Mervyn King to discuss plans to stabilise the banking system.

 

The Bank of England meets on Thursday to make its next decision on interest rates while G7 finance ministers and central bankers will meet on Friday in Washington.

 

Moscow’s two main stock exchanges opened several hours late on Tuesday after suffering heavy losses on Monday.

 

Asian markets had been mixed as traders reacted to the turmoil, with Japan's Nikkei 225 index sinking more than 5% before recovering slightly to close down 3%.

US stock markets started to rebound after a volatile bout of opening trades on Tuesday morning. The Dow Jones Industrial Average rose to 10,011 points as of 14:30 GMT, up by 0.6% from Monday’s close of 9,955.

($1 = €0.74)

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By: Mark Watts
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