04 October 2013 05:59 [Source: ICIS news]
By Nurluqman Suratman
SINGAPORE (ICIS)--Shares of major petrochemical firms in Asia were mixed on Friday as the US government entered its fourth day of partial shutdown, fuelling fears that the political impasse over the US budget could lead to a recession in the world’s biggest economy.
The US is a major trading partner of export-oriented Asian economies.
At 11:22 Singapore time (03:22 GMT), Japan’s Mitsui Chemicals advanced 1.16%, Mitsubishi Chemical rose 0.44%, while JX Holdings slipped 0.61%. The benchmark Nikkei 225 index was down 0.44% at 14,095.58.
In South Korea, LG Chem declined 2.14% and SK Innovation fell 1.38%. Lotte Chemical Corp also slipped 1.54%, as the Korea Stock Exchange KOSPI index dipped by 0.21% to 1,995.23.
In Hong Kong, Chinese refining major PetroChina was trading 0.69% lower, while Sinopec slipped 0.16%. The key Hang Seng Index was down by 0.58% at 23,079.12.
The Chinese market is closed for a week-long National Day celebration and will re-open on 8 October.
In southeast Asia, Thailand’s PTT Global Chemical was up 0.35%, while Malaysian producer PETRONAS Chemicals Group was trading 0.15% higher.
Crude prices were trading lower with Brent crude hovering at around $109/bbl, while US crude was at around $103/bbl.
“Developments on resolving the US government shutdown and the impending US debt ceiling deadline will be foremost on the minds of the markets,” Singapore-based UOB Economic-Treasury Research said in a note.
Failing to raise the US debt ceiling by 17 October raises the spectre of default, which will have more serious repercussions for the world’s largest economy, according to economists.
A default could have catastrophic consequences that might last decades, the US Department of the Treasury said in a report.
“Not only might the economic consequences of default be profound, those consequences, including high interest rates, reduced investment, higher debt payments, and slow economic growth, could last for more than a generation,” the US Treasury said.
International Monetary Fund’s managing director Christine Lagarde warned that failure by the US to raise its debt ceiling would be a far worse threat to the global economy than the current government shutdown in the US.
($1 = €0.74)
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