Tyre shares rally, Ceat soars 11%
Shares of tyre manufacturers are trading higher up to 12% after the natural rubber prices hit twenty-three month low, which may boost profitability of tyre companies.
Among the individual stocks, Ceat has soared 12% at Rs 122 on over five-fold surge in trading volumes. A combined 2.2 million shares have changed hands on the counter so far on the NSE and BSE.
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JK Tyre and Industries has rallied 10% at Rs 119, followed by Falcon Tyres (up 8%), Goodyear India and Apollo Tyres (up 3% each) and MRF by 2% on the BSE.
Natural Rubber prices have corrected by almost 10% since July in the domestic and are hovering around Rs 169/kg currently on NCDEX.
With Natural rubber prices remaining stable, cost pressures have eased leading to better margin outlook for tyre companies, according to analyst at Prabhudas Lilladher.