Europe chem stocks fall on fears Spain needs full sovereign bailout

23 July 2012 11:01  [Source: ICIS news]

Jobless people queue outside Spanish employment officeLONDON (ICIS)--European chemical stocks fell sharply on Monday, in line with financial markets, amid fears Spain will need a full sovereign bailout after a second region indicated it will ask the country's government for financial help.

At 11:39 GMT, the UK’s FTSE 100 was 1.63% lower than the previous close, Germany’s DAX had fallen by 1.60%, and the CAC 40 in France was down by 1.66%.

Despite the approval of a €100bn ($121bn) bailout package for Spain to recapitalise its financial institutions, the region of Murcia looks to follow in Valencia's footsteps and apply for funding help under the national government's assistance package. Local media has reported more regions could do the same, further denting market sentiment.

With European indices trading lower, the Dow Jones Euro Stoxx Chemicals index was down by 1.25%, as shares in many of Europe’s major chemical companies fell from the previous close.

Petrochemical major BASF’s shares had fallen by 1.31%, while fellow Germany-based chemical company LANXESS’ shares were trading down by 4.34%.

Shares in Germany-based fertilizer producer K+S and chemical firm Wacker Chemie were trading down by 0.40% and 3.14% respectively, while France-based Arkema’s shares were trading down by 2.50% from the previous close.

Norway-based fertilizer producer Yara International saw its shares fall by 1.18%.

Meanwhile, concerns that Spain's financial situation could have a negative impact on fuel demand, also forced down oil prices.

($1 = €0.83)

Additional reporting by Nurluqman Suratman

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

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