04 October 2013 11:12 [Source: ICIS news]
(updates shares, adds details)
By Nurluqman Suratman
SINGAPORE (ICIS)--Shares of major petrochemical firms in Asia closed 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 17:00 Singapore time (09:00 GMT), Japan’s Mitsui Chemicals closed 1.16% higher, Mitsubishi Chemical fell 0.22%, while JX Holdings was unchanged. The benchmark Nikkei 225 index closed 0.94% lower at 14,024.31.
In South Korea, LG Chem declined 1.32% at the close of the trade and SK Innovation fell 1.38%. Lotte Chemical Corp also slipped 0.35%, as the Korea Stock Exchange KOSPI index closed 0.12% lower at 1,996.98.
In Hong Kong, Chinese refining major PetroChina ended 0.35% 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 2.03%, while Malaysian producer PETRONAS Chemicals Group rose 0.15%.
Crude prices were trading lower with Brent crude hovering at above $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 adjust the US debt ceiling upward 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 (IMF) 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 shutdown is US government services.
To address the pressing problem in his home country, US President Barack Obama opted to stay in Washington, cancelling a planned trip to Asia next week.
Obama was supposed to attend the East Asia summit in Brunei and the Asia Pacific Economic Cooperation (APEC) summit in Bali, Indonesia, with stops in Malaysia and the Philippines.($1 = €0.73)
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