14 September 2012 14:23 [Source: ICIS news]
LONDON (ICIS)--European chemical stocks rose on Friday, in line with financial markets, following an announcement by Federal Reserve chairman Ben Bernanke on Thursday that the US central bank would launch a new round of quantitative easing.
The third instalment of the Federal Reserve’s programme to assist the US’ economic recovery will involve the purchase of $40bn/month (€31bn/month) worth of mortgage-backed securities, as well as to maintain low interest rates for longer than planned, extending the current 0-0.25% rate until at least mid 2015.
Speaking at a press conference on Thursday, Bernanke said: “While the economy appears to be on a path of moderate recovery, it isn’t growing fast enough to make significant progress reducing the unemployment rate. Fewer than half of the 8 million jobs lost in the recession have been restored. And, at 8.1%, the unemployment rate is nearly unchanged since the beginning of the year and is well above normal levels.”
As of 13:55 GMT, the Dow Jones Euro Stoxx Chemicals index was up by 1.23%, while the CAC 40 in France rose by 1.86% and Germany’s DAX index had risen 1.31%. In the UK, the FTSE 100 was up 1.45%, while the Dow Jones Industrial Average closed up 1.55% yesterday evening.
Shares in many of Europe’s largest chemical companies were also buoyed by the news, with Belgian materials company Umicore up 7.49% and UK polymer specialist Victrex up 5.88%. Swiss specialty chemicals giant Clariant also enjoyed a strong uplift of 4.81%.
Stock in French chemical company Arkema was up 3.29% from the previous close, German group Brenntag shares were up 1.53% from the previous close, and shares in British specialty chemicals major Johnson Matthey were up 4.74% from the previous close.
The Federal Reserve has not stated a duration for the quantitative easing measures, with the bank’s Federal Open Market Committee stating that the timeframe was contingent on the performance of the US economy.
The news follows European Central Bank head Mario Draghi’s announcement a fortnight ago that the ECB was preparing to buy up government debt from embattled eurozone countries in a bid to calm investor sentiment and stabilise the region.($1 = €0.77)
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