UpdateFTSE closes down 5% as Europe stocks fall

08 October 2008 17:39  [Source: ICIS news]

(Releads and updates throughout)

 

LONDON (ICIS news)--European stock markets closed significantly lower on Wednesday despite central banks cutting interest rates in an attempt to restore confidence.

 

The UK’s FTSE index, which rose sharply after the Bank of England announced a rate cut of 50 basis points, plunged in the afternoon to close 5.18% below the previous day’s trading.

 

Germany’s DAX index closed down 5.88%, while the French CAC index was 6.31% lower than Tuesday’s close.

 

Europe’s largest chemicals producer BASF’s share price slumped by 9.35% to €28.32, while German chemicals and drugs firm Bayer’s stock was 7.68% lower than the last close at €46.25.

 

Shares in French specialties firm Rhodia dropped 9.43% to €8.55, while Lanxess was down about 8% at €15.20. Wacker Chemie, which suffered a 20% slump in Monday’s crash continued its decline, falling another 14.2% to €71.18.

 

UK-based chemicals stocks recovered when the Bank of England announced it would cut interest rates in conjunction with central banks around the world but soon dropped back down. Johnson Matthey shares were down 4.38% at 1,092 pence.

 

The Bank of England and European Central Bank (ECB) cut interest rates by half a percentage point in an attempt to curb the escalating global financial crisis.

 

Central banks in the US, China, Canada, Sweden and Switzerland also cut rates as markets in Asia and Europe continued to plummet amid fears of a global recession.

 

The US Dow Jones Industrial Average fell in early New York trading despite the Federal Reserve lowering its key interest rate by 50 basis points to 1.5%.

 

($1 = €0.73)

 

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By: Mark Watts
+44 20 8652 3214

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