Moneycontrol
Jan 13, 2017 03:16 PM IST | Source: Moneycontrol.com

Tyre stocks fall on rise in natural rubber prices

Investors turned bearish on such stocks as they anticipated profitability to take a hit on the back of rising cost of natural rubber, a key component in tyre makers‘ input cost.

 
 
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Reacting negatively to the developments around natural rubber prices, major tyre stocks on Friday fell in the range of 1-4 percent.

Investors turned bearish on such stocks as they anticipated profitability to take a hit on the back of rising cost of natural rubber, a key component in tyre makers’ input cost. Natural rubber constitutes 40 percent of the total cost of the tyre.

The commodity’s price rose to a two-and-a-half-year high on January 12 due to supply constraints and tracking gains in overseas markets. There has been a disruption in supply from Thailand, the top producer of the commodity, on the back of flooding in a region.

At 14:54 hrs, Apollo Tyres had seen the biggest intraday fall among other major tyre manufacturers, with a fall of over 4 percent. Meanwhile, other firms such as MRF (nearly 3 percent), Ceat (1.1 percent), JK Tyre (1.32 percent) and Goodyear India (0.86 percent) also traded lower.

With inputs from Reuters
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