An investor sell-off of tanker stocks that started in Europe on reduced earnings outlooks spread to New York on Wednesday, on a day when most other shipping stocks and the broader market also lost ground.
Losses for the tanker names were still more pronounced. Ireland-based product tanker owner Ardmore Shipping shed nearly 7% of its share value, while Teekay Tankers and International Seaways dropped more than 6%.
Outlook dampened
Sector bellwether Frontline bled more than 5%, while clean product carrier giant Scorpio Tankers gave up nearly 5%.
DNB Markets and Pareto Securities cut target prices for several tanker stocks on Wednesday.
Pareto said commodity shipping markets have disappointed, and tanker expectations are too high.
Head of research Eirik Haavaldsen said: “The lack of volume growth, weak refinery margins — and question marks around China have been weighing.”
That sent Frontline down on the Oslo Stock Exchange, the other trading platform for its dual listing, while Danish product tanker giant Torm lost ground on its home exchange in Copenhagen.
While the negative sentiment appeared to continue in New York, shipping stocks in other operating sectors didn’t fare so well either.
Israeli container line operator Zim fell nearly 8% and dry bulk bellwether Star Bulk Carriers of Greece surrendered more than 3.5%.
Surely a bad day for the overall US stock markets did not help.
The Dow Jones Industrial Average plummeted more than 400 points, or nearly 1%, a drop similar to that of the S&P 500.
In a bad overall day for tech stocks, the Nasdaq exchange plunged 1.6%.
The reversal in the broader market rally was tied to growing doubts within the tech sector over how rapidly and how much the US Federal Reserve will slice interest rates over the next year.
