UpdateAsia chems bounce back on rate cut hopes

30 October 2008 10:08 [Source: ICIS news]

SINGAPORE (ICIS news)--Asian petrochemical stocks closed sharply higher on Thursday along with regional markets on expectations the Bank of Japan will follow the lead of US and China in cutting interest rates to rev up its flagging economy.

In Japan, Mitsubishi Chemical was up 14.85%, Asahi Kasei advanced 14.53% and Mitsui Chemicals jumped 13.05%, while the Nikkei 225 index gained 9.96% to close at 9,029.76 points.

“We are expecting there will be a quarter-point reduction in interest rates [in Japan],” said Ray Attrill, an Australian-based economist at consultancy firm Forecast.

“Cutting interest rates, although it is a very marginal change given how low interest rates are, could support efforts to try and weaken the yen against the US dollar if the Bank of Japan is going to start intervening,” he added.

At the close of trading, China’s state-owned petrochemical majors listed in Hong Kong rallied with Sinopec soaring 16.87%, despite announcing a 39% decline in third-quarter profits.

PetroChina also jumped 19.92% after reporting a 30% increase in third-quarter net profits as the Hang Seng index gained 12.82% at 14,329.85 points.

In South Korea, SK Energy rallied 14.91% at the close, Hanwha Chemical jumped 14.99% and LG Chemical rose 13.64% as the benchmark KOSPI composite index surged 11.95% to 1,084.72 points.

The People’s Bank of China and the US Federal Reserve slashed interest rates on Wednesday to boost consumer spending in their respective economies.

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By: Pearl Bantillo
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