Europe chemicals stocks sharply down on recession fears
Jonathan Lopez
22-Jun-2022
MADRID (ICIS)–European chemicals stock prices were falling sharply in Wednesday afternoon trading as investors in the region caught up with fears that the US economy may be heading into a recession.
German chemicals major BASF, with a large global exposure, was down more than 5%, compared to the close on Tuesday, by 14:15 CEST.
Other large German chemicals companies were also losing value on Wednesday, including Covestro (-4.49%), LANXESS (-4.78%), Brenntag (-4.02%).
France’s Arkema (-3.50%), Belgium’s Solvay (-3.60%) or the Netherlands’ AkzoNobel (-3.25) were also taking a battering.
Chemicals stocks were falling more than the average stock exchanges in Europe, which were all posting falls of around 2%.
The fall in European stocks follows those in Asian markets; Hong Kong’s Hang Seng index lost on Wednesday 2.56% of its value, while the Shanghai Composite lost 1.12%.
Crude oil prices also fell sharply on Wednesday on recession fears and after the US Government was reported to be considering a temporary halt to Federal taxes on gasoline in order to alleviate pressure on car users.
Late on Tuesday, US banking major Goldman Sachs said the likelihood of a recession in the US within 12 months was at 30%, up from the 15% likelihood it foresaw before.
The sharp falls on Wednesday in Europe come after a sharp rebound in US stocks on Tuesday. US stocks were still trading up on Wednesday.
“Whilst the question of whether we are about to face a recession is still dominating markets, risk assets posted a sharp rebound yesterday as the US got back from holiday [Juneteenth public holiday on 20 June],” said London-based equity analysts at Deutsche Bank.
“Before you think it’s safe to come out from behind the sofa, S&P futures are around -1% lower this morning as the recession narrative makes a bit of a comeback. European futures are indicating that yesterday’s [Tuesday] gains will be eradicated which could end a three-day winning streak … The demand destruction narrative is making a comeback in Asia as well.”
Front page picture: Sign of Germany’s
Deutsche Borse
Source: Xinhua/Shutterstock
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