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.
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