Europe chem stocks fall as Spain requests bailout for banks

25 June 2012 12:15  [Source: ICIS news]

Stocks downLONDON (ICIS)--European chemical stocks fell on Monday, in line with financial markets, as investors lost confidence after Spain formally requested a bailout for its banks.

At 11:00 GMT, the UK’s FTSE 100 was 0.74% lower than the previous close, Germany’s DAX had fallen by 1.63%, and the CAC 40 in France was down by 1.76%.

Spanish authorities have requested European financial aid of up to €100bn ($125bn) for recapitalisation of its financial institutions.

The request was made in a letter addressed to Eurogroup head Jean-Claude Juncker from Spain's economy minister Luis de Guindos. The final total of financial aid will be set at a later stage.

“Restructuring the banking sector is key to reinforce the confidence in the Spanish economy and to restore the conditions to proper access to credit by companies and households, thus for sustaining the recovery,” said Olli Rehn, vice president of the European Commission.

With European indices trading lower, the Dow Jones Euro Stoxx Chemicals index was down by 0.86%, as shares in many of Europe’s major chemical companies fell from the previous close.

Petrochemical major BASF’s shares had fallen by 1.28%, while fellow Germany-based chemical company Bayer’s shares were trading down by 1.55%.

Shares in Germany-based fertilizer producer K+S and chemical firm Wacker Chemie were trading down by 0.67% and 1.01% respectively, while France-based Arkema’s shares were trading down by 2.52% from the previous close.

Norway-based fertilizer producer Yara International saw its shares fall by 1.04%.

Crude oil futures also weakened on the back of rising concerns over Spain’s economy.

($1 = €0.80)

By: Franco Capaldo
+44 (0)20 8652 3214

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