Market turns bearish

On Wednesday sharp gains in the Bangkok spot market kept the Indian traders active and spot rubber was bullish following a better closing on the National Multi Commodity Exchange. Yesterday, the RSS4 grade closed at `.171 at Kottayam and RSS3 closed at `.169.10 at Bangkok. While June futures closed at `.172.28, July at `.171.40, August at `.169.27, September at `.165.99 and October at `.163.52 a kg on the NMCE. The Malaysian rubber market also finished higher, extending its gains for the third consecutive day, boosted by positive sentiment.

The crackdown on companies which are heavily involved in buying and selling imported goods, are struggling to get trade loans as banks scrutinise their activities and hold back credit following Beijing's orders to rein in currency speculation. Chinese Banks have stopped issuing letters-of-credit with long maturity dates, which in turn will take the commodity market to the bearish trend. Meanwhile, supply from Thailand is expected to increase in the coming months on seasonal factors.

Today, on the Tokyo Commodity Exchange, May futures series closed in negative at ¥264.1, June at ¥266.5, July at ¥268.1, August at ¥271.2, September at ¥272.9 and the contract for delivery in October closed at ¥275 a kg. While on the National Multi Commodity Exchange June futures were trading at `.169.50, July at `.168.39, August at `.167.17, September at `.164 and October at `.163.97 a kg at 1 pm IST.