Tokyo futures higher, economic worries cap gains

BANGKOK: Tokyo rubber futures ended higher on Monday as some players thought levels looked attractive after last week's fall, but a drop in oil prices and renewed concern about the global economy limited the gains, dealers said.

The benchmark rubber contract on the Tokyo Commodity Exchange for January delivery rose 5.1 yen, or 1.4 percent, to settle at 357.4 yen ($4.68) per kg.

Last week, the market posted a 2.6 percent fall, its third weekly loss in a row, as worries about the global economic outlook triggered a broader sell-off in stock and commodity markets.

The most active Shanghai rubber contract for January delivery dropped 640 yuan on Monday to finish at 32,850 yuan ($5,138) per tonne.

"Rubber sentiment improved as buyers kept buying back contracts during the early part of the session. But weak sentiment as regards oil and the global economy capped the rises," one dealer said.

Brent crude fell $3.08 to reach $105.54 a barrel on Monday.

Cleveland Federal Reserve Bank President Sandra Pianalto said on Friday the US economy was growing so slowly that it would take years to wrench unemployment rates back down to more normal levels.

Asian stocks fell on Monday, expanding last week's steep losses, and gold hit another high as investors continued to worry about the economic outlook in the United States and European debt woes.

Dealers said TOCOM could rise further after prices finished above a psychological support level at 350 yen but they doubted the market could push much higher.

Copyright Reuters, 2011