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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