02 August 2012 16:58 [Source: ICIS news]
LONDON (ICIS)--European chemical stocks fell sharply on Thursday, in line with financial markets, as investors were left disappointed after the European Central Bank (ECB) failed to announce immediate action to stimulate the eurozone economy.
There had been an expectation that the ECB would take unprecedented steps to ease the single currency region’s debt crisis after its president, Mario Draghi, said he would do whatever it takes to save the euro.
However, earlier on Thursday, the ECB left its key interest rate unchanged at a record-low 0.75%, and Draghi signalled that “over the coming weeks" the bank would come up with monetary policy measures to help eurozone countries in trouble.
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Draghi did say that the ECB is ready to intervene in sovereign bond markets to lower borrowing costs for some weaker economies. He also made it clear that struggling eurozone governments need to apply for the eurozone funds and accept strict conditions to receive funding.
With European indices trading lower, the Dow Jones Euro Stoxx Chemicals index was down by 1.63%, as shares in many of
Petrochemical major BASF’s shares had fallen by 2.27%, while fellow Germany-based chemical company LANXESS’s shares were trading down by 2.28%.
Shares in Germany-based fertilizer producer K+S and chemical firm Wacker Chemie were trading down by 1.56% and 1.63% respectively, while France-based Arkema’s shares were down by 1.30% from the previous close.
Norway-based fertilizer producer Yara International saw its shares fall by 0.42%.
Earlier, NYMEX light-sweet crude oil futures fell by almost $2.00/bbl. By 13:30 GMT, the front-month September NYMEX WTI contract had touched an intra-day low at $87.09/bbl, a loss of $1.82/bbl compared with Wednesday’s settlement. The contract then edged a little higher to trade around $87.20/bbl.
At the same time, September ICE Brent crude oil futures were trading around $105.25/bbl, having touched an intra-day low at $104.97/bbl, a loss of 99 cents/bbl compared with the previous close.
Additional reporting by Kawai Wong
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