Nikkei plunges to 26-year low, Asia chems slump

27 October 2008 09:27  [Source: ICIS news]

SINGAPORE (ICIS news)--Recession fears pummelled Asian markets on Monday as Japan’s benchmark Nikkei 225 index plunged to a 26-year low and petrochemicals stocks continued their falls.  

 

Japan’s Nikkei shed 486.18 points, or 6.36%, to close at 7,162.90 points, its lowest level since 1982.

 

Investors sold off petrochemical stocks given the gloomy outlook on demand that was set to see prices falling in tandem with crude oil, analysts said.

 

Japanese petrochemical majors fell in line with the Nikkei as Asahi Kasei closed down 7.81%, Mitsui Chemicals fell 8.95% and Mitsubishi Chemical slumped 14.54%.

 

“The financial crisis’ impact has begun to ripple to the real economy in Japan. The manufacturing industry was threatened as demand from Europe and the US declined,” said Li Hongrong, an analyst from China’s Ping An Securities.

 

South Korea surprised the market with a record 75-basis point cut in key interest rates to 4.25% to shore up its slowing economy, leading the KOSPI to gain 7.70 points, or 0.82%, at the close after losing more than 20% last week.

 

But Hanwha Chemical took a different direction, sliding 15%, while SK Energy fell 3.09% at the close.

 

Hong Kong’s Hang Seng index declined 12.70% to close at 11,015.84 points, with state-owned major PetroChina tumbling 15% and Sinopec down 16.44%.

 

Judith Wang contributed to this story

 

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By: Pearl Bantillo
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