This entry was posted on Monday, November 2nd, 2009 at 8:34 pm and is filed under Rubber News. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
SINGAPORE (Dow Jones)–Natural rubber futures on the Tokyo Commodity Exchange fell by as much Y10.5 per kilogram, passing the first daily lower limit on the way down in morning trading Monday, as investors took leads from a broad-based sell-off across asset classes.
Rubber”s own fundamentals are strong, but traders seem to have panicked after a 3.6% decline in crude oil prices Friday, a Tokyo-based brokers said.
Trading of the benchmark Tocom RSS3 April contract was briefly halted when it reached Y221.3/kg, down Y10, and by 0449 GMT, it had recovered from an intraday low of Y220.8 to Y223.8/kg, down Y7.5.
“It is not just rubber, but most commodities and financial markets that have taken a toll due to new concerns” about the ability of the global economy to pull out of recession, the broker said.
Rubber will probably trade in the Y220-Y230/kg range over the next few days, he added.
U.S.-based lender CIT Group Inc.”s (CIT) decision to file for bankruptcy protection has sent ripples across asset classes, traders said.
Profit-taking on Tocom ahead of public holiday in Japan Tuesday accelerated rubber”s decline.
The main factors driving rubber futures” descent were yen strength and weaker crude oil prices, said an analyst in Singapore.
Yen rose to Y89.18 against the dollar in early trade, its highest level since Oct. 14. A stronger yen makes rubber imports cheaper and pulls Tocom futures prices down.
Nymex light, sweet crude for December delivery continued to fall after their Friday settlement of $77 a barrel in early Asian trade, and were trading at 50 cents higher at 0514 GMT.
Source: Dow Jones