Europe chem stocks rebound on bank rescue plan

13 October 2008 09:19  [Source: ICIS news]

LONDON (ICIS news)--Europe’s chemicals stocks rose in early trading on Monday after the region's leaders agreed on a rescue plan to tackle the banking crisis.

 

At a meeting in Paris over the weekend, leaders of the 15-member eurozone agreed to guarantee inter-bank lending until the end of 2009, and said they would recapitalise them through buying preference shares.

 

The Dow Jones Eurostoxx Chemicals index climbed 3.93% after markets opened at 07.25 GMT, recovering marginally from a huge downturn over the last week.

 

Germany’s DAX index rose 5.78% against Friday’s close, the UK’s FTSE 100 was up 5.22%, while France’s CAC 40 surged 6.30%.

 

Chemicals major BASF’s shares were up 5.83% at €27.04 ($36), German chemicals and drugs maker Bayer rose 1.97% to €42.01, while coatings producer Akzo Nobel’s shares rose 3.14% to €28.88.

 

Several companies’ stocks surged by over 10%, including Arkema, Lonza, Wacker Chemie and fertilizer producer Yara.

 

Meanwhile the British government announced its plan to inject up to £37bn ($63bn/€46bn) of new capital into Royal Bank of Scotland, Lloyds TSB and HBOS, giving UK taxpayers a large share of the country’s major banks.

 

Asian petrochemical stocks also rebounded following weeks of heavy sell-down as investors cheered the measures of the industrialised economies to unfreeze the credit markets.

 

($1 = €0.74/$1 = £0.58)

 

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By: Mark Watts
+44 20 8652 3214

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