UpdateEurope chems stocks continue downturn

16 October 2008 17:36  [Source: ICIS news]

(Releads and updates throughout)

 

LONDON (ICIS news)--European chemicals stocks took further losses on Thursday as confidence in the markets weakened further over fears of a worldwide recession.

 

London’s FTSE 100 index continued to fall, down 5.46% from Wednesday’s close to keep it below the 4,000 mark, its lowest point in five years.

 

All the major European chemicals companies saw significant falls throughout the day, with shares in BASF down 9.04% at €23.96, Bayer 8.60% lower at €38.28 and LANXESS shedding 11.58% at €13.90.

 

Akzo Nobel was 4.99% lower at €27.98, Arkema was down 7.99% at €18.53 and the UK's Johnson Matthey was trading down 4.39% at 937 pence.

 

Germany's Dax index dropped 4.91%, while in Paris the CAC was down 5.92% and the Dow Jones Eurostoxx Chemicals Index fell 7.55%.

 

The crude oil markets fell by more than $3/bbl on Thursday when this week’s US stock figures from the Energy Information Administration (EIA) showed much larger than expected builds on crude and gasoline.

 

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

 

US stocks on the Dow Jones Industrial Average (DJIA) continued falling on Thursday, losing 254 points - or 3% - in early trading.

 

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: Mark Watts
+44 20 8652 3214

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