UpdateEurope chemical stocks fall as Greece coalition talks fail

15 May 2012 17:45  [Source: ICIS news]

(updates throughout)

LONDON (ICIS)--European chemical stocks fell late on Tuesday, in line with financial markets, as Greece’s political leaders failed to form a government after several days of talks.

Leaders from Greece’s political parties met early on Tuesday to agree terms to form a new government but they have been unable to agree on fiscal measures put forward by the European Commission to receive a bailout package.

As a result of the unsuccessful meetings, new elections will be held in June if a government is not formed by Thursday’s deadline. Greece's president, Karolos Papoulias, will meet with political leaders on Wednesday to form an interim government until the election.

At closing, the UK’s FTSE 100 index was down 0.51% on the previous day’s close. Germany’s DAX was down 0.79%, and the French CAC 40 was trading down by 0.69%.

With European indices trading lower, the Dow Jones Euro Stoxx Chemicals index was down by 1.04% as shares in many of Europe’s major chemical companies fell.

Petrochemical major BASF’s shares were trading down by 0.69%, while fellow Germany-based chemical company Bayer’s shares were down by 0.64%.

Shares in Belgium’s Solvay were down by 3.45%, while France-based Arkema’s were trading down 1.77%.

Germany-based chemical company LANXESS’s shares were trading down by 1.53%.

Earlier on Tuesday, European chemical stocks and financial markets were up slightly, as the latest GDP figures showed the region narrowly avoided going into recession.

GDP remained stable at 0.0% in both the eurozone and the 27-member EU during the first quarter of 2012 compared to the previous quarter, said statistics agency Eurostat.

In the fourth quarter of 2011, both the eurozone and EU’s GDP contracted by 0.3%. A recession is defined by GDP contracting in two consecutive quarters.

On a year-on-year basis, eurozone GDP was also flat in the first quarter of 2012 at 0.0%, while the EU increased by 0.1%, it added.

However, concerns over Greece and Spain continued to affect investor confidence.

Eurostat said Greece’s GDP contracted by 6.2% year on year in the first quarter of 2012, while GDP in Spain dropped by 0.4%.

Meanwhile, Francois Hollande was sworn in as French president this morning and is set to meet Germany’s Angela Merkel later on Tuesday to discuss the EU’s fiscal situation.

Read Paul Hodges’ Chemicals and the Economy blog

By: Leigh Stringer
+44 208 652 3214

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