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TOCOM plunges to 2-week low as tumbling stock markets hurt

Benchmark Tokyo rubber futures plunged to their lowest in two weeks on Thursday, tracking losses in Shanghai futures, dragged down by slumping global stock markets and weaker oil prices.

Share markets in Asia plunged to a 19-month low on Thursday after Wall Street's worst losses in eight months led to broader risk aversion, a rise in market volatility gauges and concerns over overvalued stock markets in an environment of rapidly rising dollar yields.

Oil fell to two-week lows on Thursday as it extended losses from the previous session amid a rout in global stock markets, with prices also hit by an industry report showing US crude inventories rose more than expected.

"A plunge in global equities markets prompted a flurry of selling," said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

The Tokyo Commodity Exchange (TOCOM) rubber contract for March delivery finished 3.5 yen, or 2.0%, lower at 169.2 yen (US$1.5) per kg.

TOCOM futures, which set the tone for rubber prices in Southeast Asia, dove to the lowest since Sept 28 of 167.0 yen earlier in the session.

The exchange's new technically specified rubber (TSR) futures contract for April delivery also dipped 3.7% to close at 153.0 yen per kg.

TOCOM launched the new rubber futures on Tuesday as the bourse looks to return to profitability by expanding its product listings.

The most-active rubber contract on the Shanghai futures exchange for January delivery slumped 450 yuan to finish at 12,160 yuan (US$1,755) per tonne, after hitting an about 3-week low earlier in the session.

The front-month rubber contract on Singapore's SICOM exchange for November delivery last traded at 132.1 US cents per kg, down 1.6 cent.

"If the global stock markets continue to fall, rubber prices will come under further pressure," Kikukawa said.

The Association of Natural Rubber Producing Countries (ANRPC) is holding its annual conference in northern Thailand this week.

The Rubber Authority of Thailand told Reuters on Tuesday that there won't likely be any announcements during the meeting that covers more general topics of the industry.

Price issues are expected to be discussed among the world's top exporters in the International Tripartite Rubber Council's (ITRC) next meeting to be held later this year in Malaysia, it said.

(US$1 = 6.9284 Chinese yuan)

(US$1 = 112.2600 yen)