Europe chem stocks down on shrinking economy forecast for eurozone

11 May 2012 14:16  [Source: ICIS news]

LONDON (ICIS)--European chemical stocks were down on Friday, in line with financial markets, after it was announced that the eurozone economy is set to shrink by 0.3% in 2012.

The European Commission announced on Friday, in its spring forecast for 2012–2013, that real GDP is projected to stagnate in the 27-member EU, while in the euro area it is expected to contract by 0.3% in 2012 and then increase by 1.0% in 2013.

The Commission added that following an output contraction in late 2011, the EU economy is estimated to currently be in a mild recession.

At 12:19 GMT, the UK’s FTSE 100 was down by 0.49%, Germany’s DAX had fallen by 0.35%, and the CAC 40 in France was down by 0.93%.

With European indices trading lower, the Dow Jones Euro Stoxx Chemicals index was down by 0.59%, as shares in many of Europe’s major chemical companies fell from the previous close.

Petrochemical major BASF’s shares had fallen by 0.50%, while fellow Germany-based chemical company LANXESS’s shares were trading down by 1.53%.

Shares in Belgium’s Solvay were down by 1.41%, while France-based Arkema’s shares were trading down by 1.44% from the previous close. Norway-based fertilizer producer Yara International's shares were trading down by 4.13% on the previous close.

Olli Rehn, the Commission's vice president for economic and monetary affairs and the euro, said a recovery is in sight but the economic situation remains fragile, and there was still a large disparity across member states.

“We are witnessing an ongoing adjustment of the fiscal and structural imbalances built up before and after the onset of the crisis, made worse by the still weak economic sentiment,” he added.

“Without further determined action, however, low growth in the EU could remain. Sound public finances are the condition for lasting growth, and building on the new strong framework for economic governance, we must support the adjustment by accelerating stability and growth-enhancing policies," said Rehn.

By: Leigh Stringer
+44 208 652 3214

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