Tyre stocks are on fire today. Know why

Tyre stocks were on fire in the futures and options space as the continued drop in global rubber prices, their main raw material, augured well for their earnings in the coming quarters.

Ceat, MRF and Apollo Tyres were among the top quartile of the gainers' list thanks to a 22 percent drop in global prices for Rubber sinceJune 1st. Quarterly earnings from major companies such as Ceat and MRF has shown a sharp jump in operating margin due to lower costs. However, MRF is on record to say that such margin expansion will be difficult to maintain.

Tyres stocks in the cash market were buzzing as well, hence, TVS Srichakra, Modi Rubber, Dunlop and Goodyear and Balkrishna Industries rocketed in trade on the Bombay Stock Exchange.

Meanwhile, here is a look at prices:

TVS Srichakra jumped 11.4 percent to 2,873 rupees. Ceat surged 5.7 percent to 979 rupees. Open Interest leapt 14.5 percent. Modi Rubber gained 4.9 percent to 35.25 rupees. MRF was up 4.5 percent to 44,450 rupees. Open Interest rose 15.4 percent GoodYear gained 3.2 percent to 643.75 rupees. and Apollo Tyres rose 2.2 percent to 211.80 rupees. Open Interest was up 4.3 percent.

Image credit: Indiatimes