Europe chems stocks fall as confidence weakens

16 October 2008 09:44  [Source: ICIS news]

LONDON (ICIS news)--European chemical stocks continued to fall on Thursday as confidence in the markets weakened further over fears of a worldwide recession.

London's FTSE 100 index opened around 5% down from Wednesday's close and was trading back below the 4,000 mark, its lowest point in five years.

This followed dramatic falls in the US and Asia as Federal Reserve chairman Ben Bernanke spoke of a tough and possibly worse time ahead.

All the major European chemicals companies saw significant falls in early trading, with shares in BASF down 6.19% at €24.70, Bayer 3.5% lower at €40.03 and LANXESS shedding 5.19% at €14.80.

Akzo Nobel was 3.09% lower at €28.24, Arkema was down 4.77% at €19.18 and the UK's Johnson Matthey was trading down 6.53% at 0.916p.

Germany's Dax index dropped 3.3%, while in Paris the CAC was down 3.59% and the Dow Jones Eurostoxx Chemicals Index fell 5.65%.

Crude futures fell more than $2/bbl to a new 13-month low on Thursday.

At 06:28 GMT, November NYMEX light sweet crude futures were trading at $72.46/bbl, down $2.08/bbl from Wednesday’s settlement level, having earlier hit a low of $72.10/bbl down $2.44/bbl.

Crude has now fallen 50% since hitting all-time record highs above $147/bbl in July following drastic cuts in demand growth.

 

Germany, Europe's largest chemicals producer, was said to be on the brink of recession earlier this week after think-tanks in the country forecasted economic growth would almost grind to a halt next year.

Chemical employers group Bundesarbeitgeberverbrand Chemie (BAVC) also painted a pessimistic outlook for the industry. 

Citigroup on Wednesday cut price targets for most of its Europe chemicals portfolio by 6-60%, predicting that things would turn "ugly" as producers were expected to lose pricing power amid the widespread economic slowdown.

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By: Graeme Paterson
+44 20 8652 3214

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