Europe chems share fall as investor fears resume

22 October 2008 16:42  [Source: ICIS news]

LONDON (ICIS news)--Chemicals shares fell further on Wednesday as European stock markets dropped over renewed fears of a global recession and a deepening of the financial crisis.

At 14:29 GMT, the UK-based index FTSE was down 4.36%, Germany’s Dax index was down 4.62% and France’s CAC index had fallen 4.29%.

Chemicals shares have dropped significantly during the past few weeks, with the Dow Jones Eurostoxx chemicals index losing more than 30% of its value in a month.

German chemicals and pharmaceuticals major Bayer’s shares were down 4.14% to €41.40 on Wednesday, while BASF’s shares were 4.58% lower at €23.75.

In the UK, Johnson Matthey’s shares lost 7.16% of its value to 900.5 pence, while oil major BP’s stocks dropped 5.6% to 442.25.

Shares in Switzerland’s Clariant were down 8.11% at Swiss francs (Swfr) 6.91, while Belgium’s Solvay saw 7.31% wiped off the value of its stock to €68.39.

The Bank of England’s governor Mervyn King has said that the UK economy was likely to sink into recession in 2009, as economic fears sent the pound plunging to a five-year low against the dollar.

The country’s Prime Minister Gordon Brown also said the economic downturn was likely to cause a recession.

On Tuesday, the International Monetary Fund (IMF) said more European banks may fail due to continued worries about the viability of their business models.

In a six-monthly study it said private funding was virtually unavailable and that banks were forced to reply on public intervention, asset sales and consolidation.

It also warned that growth in the eurozone would almost grind top a standstill next year.

($1 = €0.76/Swfr1.15)

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By: Hilde Ovrebekk
+44 20 8652 3214

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