BANGKOK: Tokyo rubber futures tumbled to a one-month low on Tuesday, weighed down by worries over Greece and a downgrade of Italy by Standard and Poor's that encouraged players to sell heavily to avoid risks, dealers said.
Analysts said the downgrade was ominous for the global economy and needed an urgent response. It overshadowed reports that Greece, scrambling to avoid running out of money within weeks, was near a deal to continue receiving bailout funds and that Brazil was willing to pump in $10 billion through the IMF to aid Europe.
The benchmark rubber contract on the Tokyo Commodity Exchange for February delivery fell 13.6 yen to settle at 351.6 yen ($4.6) per kg.
It fell as low as 3.9 percent to an intra-day low of 351.0 yen per kg, the lowest since August 22. The market was closed on Monday for a national holiday.
The most active Shanghai rubber contract for January delivery fell 120 yuan to finish at 31,805 yuan ($4,998) per tonne.
"Rubber futures fell in line with other commodities that were dragged down by Greece's problem. Sentiment was weak after prices fell below major support level of 360 yen, encouraging players to liquidate contract to avoid risks," one dealer said.
Greek Finance minister Evangelos Venizelos said the country's conference call with its international lenders was satisfying and would continue late on Tuesday but he added some work still needed to be done.
Brent crude futures steadied above $109 on Tuesday, after two days of heavy losses on worries that a looming default by Greece will destabilise the global financial system, threaten global growth and pare oil consumption.
Dealers said they expected TOCOM prices to rebound on Wednesday after the benchmark finished above a major support level of 350 yen and steadier oil prices should lend support.
Copyright Reuters, 2011
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