TOKYO, Sept 29 (Reuters) – Benchmark TOCOM rubber futures fell to a 3-week low on Tuesday, dragged down by a slumping Tokyo equity market and worries over the economic health of top buyer China after industrial firms suffered their biggest profit drop in four years.
FUNDAMENTALS
- The Tokyo Commodity Exchange rubber contract for March delivery had fallen 5.9 yen, or 3.5 percent, to 164.7 yen per kg by 0035 GMT, after inching higher on technical buying the previous day. It earlier hit a low of 164.5 yen, the lowest since Sept.7.
- Profits earned by Chinese industrial companies declined at the sharpest rate in four years in August as costs kept rising and product prices kept falling, according to official data that adds to signs of weakness in the world’s second largest economy.
- German prosecutors launched an investigation on Monday into fraud allegations against former Volkswagen boss Martin Winterkorn, showing their determination to get quickly to the bottom of a scandal over rigged emissions tests that has rocked the global car industry.
MARKET NEWS
- Japan’s benchmark Nikkei stock average was down 2.6 percent in Tuesday trade, after U.S.stocks ended sharply lower the previous day and were on track for their worst quarter in four years as investors worried about the health of China’s economy.
- Copper and aluminium slid to one month lows on Monday while zinc hit its weakest level in more than five years on worries about upcoming data that may show weak industrial activity in top metals consumer China. MET/L
- Oil prices fell nearly 3 percent on Monday, pressured by umbling equities on Wall Street and weak Chinese economic data.
- The yen was broadly firmer early on Tuesday, underpinned by safety flows stemming from a selloff in global equities, a risk-off mood that took a heavy toll on commodity currencies. The U.S. dollar was quoted around 119.69 yen.
DATA/EVENTS (GMT)
The following data is expected on Tuesday: (Time in GMT)
- 0700 Euro zone business climate, economic sentiment Sept
- 0700 Euro zone consumer confidence Sept
- 1230 US Adv Goods Trade Balance August
- 0200 US Consumer Confidence Sept
(Reporting by Yuka Obayashi; Editing by Michael Perry)
