Tyre stocks on fire - Balkrishna Industries jumps over 7%!
5paisa Research Team
Last Updated: 9th December 2022 - 12:07 pm
Indian benchmark indices opened with a gap-up on Monday and Nifty surged to touch highs of 15977.95.
In the mid-day trades, the index failed to hold on to the gains as traders have used bounce–back in the index as a sell on rise opportunity. Owing to this, the index is down by more than 100 points from the day’s high. Despite this volatile movement, there is one segment buzzing on bourses; which are the tyre stocks.
Balkrishna Industries is leading the way as it jumped over 7%, while Apollo Tyres is up by 4.2%, JK Tyre is up by 1.1%, MRF is up by nearly 1%, and CEAT is trading flat.
So, why these stocks are moving up, in otherwise a very wobbly market?
The reason for these stocks moving up is related to its important raw material - rubber. It is the main raw material used in manufacturing tires. Interestingly, the rubber price (JPY/KG) has declined to 241.50 mark from the recent highs of nearly 275 which was marked in April. In percentage terms its nearly 12% off from its recent high.
Over the last one month some of the Tyre stocks have relatively outperformed the benchmark indices. MRF has jumped 7.53% and Apollo Tyres is up by 4.1%, while on other hand, Balkrishna Industries, CEAT and JK Tyre have delivered negative return amid correction in the market.
Technically, the stock of MRF and Apollo Tyres are favourable placed. The stock of MRF needs to sustain above the level of Rs 73400, this would open gates for at least 4-5% quick move on the upside. Meanwhile, the stock of Apollo Tyres needs to sustain above the level of Rs 212 and on closing basis to open gates for Rs 225 in the short term. Hence, keep a close watch on these stocks!
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