Chemicals stocks slip on Germany recession fears

15 October 2008 11:06  [Source: ICIS news]

LONDON (ICIS news)--European chemicals markets dropped in early trading on Wednesday amid fears that Germany was on the brink of a recession for the first time since 2002-2003.

 

Top think-tanks in Germany forecasted that the economic growth of Europe’s largest chemicals producer would grind almost to a halt next year, and predicted a decline in overall output in the second half of 2008.

 

Shares in Germany’s largest chemicals producers lost some value after sharp gains earlier in the week.

 

Industry major BASF fell 1.62% at €28.63, while the stock of chemicals and drugs maker Bayer dropped 1.57% to €44.49.

 

Specialties producer LANXESS was trading 4.39% lower than Tuesday’s close at €16.54, and shares in fertilizer producer K+S dropped 3.97% to €42.12.

 

Germany’s Dax index dropped 2.15% amid a Europe-wide markets downturn which saw London’s FTSE lose 2.68% of its value and Paris’s CAC index fall 2.01%.

 

Several markets nosedived at record levels last week before climbing on Monday after Europe’s leaders agreed on a bail-out plan to stabilise the continent’s banking sector.

 

The banking crisis was set to dominate Wednesday’s EU summit in Brussels, when the 27-member bloc is expected to rally behind the multi-billion-euro rescue scheme.

 

Green groups were fearful that the summit, originally due to focus on climate change, would derail plans to discuss environmental policy.

 

Stocks in Asia also dropped back after twp days of gains, while recession fears pushed US stocks lower on Monday, despite the government backing a $250bn (€183bn) rescue plan for the banking system.

 

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($1 = €0.73)

By: Mark Watts
+44 20 8652 3214

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