The chemicals sector boasts it is the “industry of industries”. Without chemicals, cars cannot run, planes will not fly and drugs do not work. That is why bad news from Germany’s BASF is significant outside the world of glycols and acrylic monomers. The profit warning from the world’s biggest chemical maker indicates wider economic woes.

BASF said a global slowdown, mainly because of the US-China trade conflict, was to blame. The news dragged down European shares, with companies exposed to the auto industry or China particularly hard hit. German chemical companies Lanxess and Covestro joined BASF in early falls of at least 4 per cent.

Rightly so. BASF’s profits warning was severe. It had previously forecast a rise in full-year adjusted operating profits. Now it expects a fall of up to 30 per cent. But some investors had already thought management over-optimistic. Hedge fund Marshall Wace has taken a big short position. BASF’s market value has fallen by more than a quarter over the past year.