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Sunday, September 24, 2023

TOCOM rubber bounces back on bargain-hunting after 5-day loss

TOKYO (Sept 7): Benchmark Tokyo rubber futures bounced back on Monday, recovering from a fresh six-year trough hit earlier in the day and snapping five days of losses, as investors looked for bargains, although sentiment remained bearish, dealers said.

The Tokyo Commodity Exchange (TOCOM) rubber contract for February delivery finished 3.3 yen or 2% higher at 167.4 yen (US$1.40) per kg. It earlier slid to a low of 162.7 yen, the lowest since July 16, 2009.

“The market turned around on the back of bargain-hunting after five straight sessions of falls,” said Toshitaka Tazawa, analyst at Fujitomi Co.

The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, lost 8% last week, marking a third straight weekly fall.

A rise in Nikkei index also lent a support, Tazawa said.

Japanese stocks eked out small gains on Monday after bouncing back from a seven-month low in choppy trade.

“But this correction may not last long as market sentiment is still languid and investors are worried about unstable stock prices in China,” Tazawa added.

China stocks closed down on Monday, after a volatile day as investors sold shares in the aftermath of a four-day market holiday.

The most-active rubber contract on the Shanghai futures exchange for January delivery rose 95 yuan to finish at 11,410 yuan (US$1,792.02) per tonne.

The front-month rubber contract on Singapore’s SICOM exchange for October delivery last traded at 123.5 U.S. cents per kg, up 1.6 cent.

(US$1 = 119.2900 yen)
(US$1 = 6.3671 Chinese yuan)

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