Asia petrochemical shares fall on concerns over eurozone health

05 April 2012 06:02  [Source: ICIS news]

By Nurluqman Suratman

Shares of petrochemical companies in Asia fall as demand slows down in AsiaSINGAPORE (ICIS)--Shares of most major petrochemical firms in Asia declined on Thursday, in line with regional bourses, amid renewed concerns over the health of the eurozone, which is among the region’s biggest importers of petrochemical products.

Among Japan’s petrochemical firms, Mitsubishi Chemical was down by 0.46%, Mitsui Chemicals dipped by 0.82% and Asahi Kasei was down by 0.8% as the benchmark Nikkei 225 index fell by 0.94% to 9,727.99 at 11:35 hours Singapore time (03:35 GMT).

In South Korea, Hanwha Chemical was down by 1.17% and Honam Petrochemical was 1.41% lower while SK Chemicals bucked the trend with a 1.28% increase. The KOSPI composite index slipped by 0.34% to 2,011.70.

PetroChina shares listed in Shanghai slipped by 0.10% while Sinopec Shanghai Petrochemical was up 1.9% as the Shanghai Composite Index rose by 1.28% to 2,291.66.

The Hang Seng Index in Hong Kong was down by 1.20%, or 249.07 points, at 20,541.91.

Thailand’s PTT Global Chemical was down by 0.73%, while Siam Cement was 0.86% lower as the benchmark SET Index dropped by 0.59% to 1,191.00.

Concerns over Spain’s financial health sparked a global bout of risk aversion after a weak bond sale on Wednesday spurred concerns about funding difficulties by lower-rated nations in the eurozone, according to media reports.

Spanish Prime Minister Mariano Rajoy’s comments deepened the pessimistic sentiment as he said Spain's situation is one of "extreme difficulty" and indicated that his proposed budget cuts will be easier to bear compared with taking a bailout, according to Singapore-based UOB Economic-Treasury Research.

Although the recession in Europe will probably extend into the third quarter of this year, the economy may pick up “modestly” late this year and in 2013, said ratings firm Standard & Poor's.

"Germany and other core northern countries of the eurozone should see sluggish GDP growth this year, while their southern neighbours – namely Italy, Spain, and Portugal – are likely to experience a genuine recession," said Jean-Michel Six, a chief economist at Standard & Poor's.

Asian stocks ended mostly lower on Wednesday amid light trading volumes after the US Federal Reserve damped expectations for more monetary stimulus earlier this week.

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Nurluqman Suratman

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