Asia chem stocks fall as financial turmoil rages

06 October 2008 10:38  [Source: ICIS news]

SINGAPORE (ICIS news)--Asian petrochemical stocks and regional indexes remained depressed on Monday, beset by concerns of a global recession, analysts said.

 

At 08:20 GMT, shares of Sinopec Corp closed down 7.89% and PetroChina shed 6.74%, while Hong Kong’s Hang Seng index was down 4.97% at the close at 16803.76 points.

 

Japan’s Mitsui Chemicals plunged 10.16%, while Mitsubishi Chemical slumped 5.37% as the Nikkei 225 lost 4.25% to close at 10,473.09 points.

 

South Korea’s SK Energy lost 6.47% and Hanwha Chemicals fell 6.28% at the end of trade as the country’s benchmark KOSPI Composite index declined 4.29% to close at 1,358.75 points.

 

At the same time, the benchmark Shanghai Stock Exchange Composite index retreated 5.23% to 2,173.74 points, following a week-long holiday. 

 

“Investor worries have now shifted beyond just the US economy and Wall Street. More focus is now being placed on the credit markets with global inter-bank rates still remaining at relatively elevated levels,” said Song Seng Woon, regional economist at CIMB-GK.

 

“There are now acute worries of a global recession and more failures of banks out [in] the US,” he added. “There are currently signs of the US economy slowing to a point of recession. It is still unclear of whether the bailout will work or not.”

 

The passage into law of a controversial $700bn US financial rescue package last week failed to assuage investor concerns about a major fallout from the raging credit crisis and there were fresh worries in Europe in the wake of the German government’s €50bn ($68bn) lifeline to banking group Hypo Real Estate over the weekend.

 

($1 = €0.73)

 

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Author: Bohan Loh
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