SINGAPORE: Tokyo rubber futures extended losses on Tuesday as equities and other commodities fell after a European Union summit aimed at solving the region's deteriorating debt crisis failed to restore financial market confidence.
Stocks in Asia plunged and the euro languished near a two-month low as investors took fright at the prospect of mass euro zone sovereign ratings downgrades after the outcome of a "last chance" EU summit was unable to convince markets.
The most active Tokyo Commodity Exchange rubber contract for May delivery ended 2.8 yen a kg lower at 274.6 yen after hitting an intraday low at 272.2 yen. The contract plunged to a near 2-year low of around 248 yen in November.
"For this week, I think the concern is more on the European debt crisis. Rubber is more likely to track macroeconomics changes," said Ker Chung Yang, analyst at Phillip Futures in Singapore.
"Coming to the year-end, I would expect the physical market to go quieter," said Ker, who pegged support levels at 248 and 250 yen.
In the physical market, Indonesia's SIR20 tyre grade changed hands at 154.50 US cents a pound ($3.41 a kg) for February shipment.
Offers were limited in Southeast Asia after a combination of dry and wet weather curbed supply in Thailand, Indonesia and Malaysia.
The Indonesia Commodity & Derivative Exchange (ICDX) is planning to launch a physical rubber contract following talks with the International Tripartite Rubber Council, but timescale and details had yet to be decided.
In other commodities, gold fell to its lowest in seven weeks, London copper extended losses, while Brent crude was little changed after falling in the previous session on worries that last week's pact by European leaders may not be enough to limit the region's debt crisis.
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