Tyre Stocks Are Up In Other Wise Weak Markets: Here's Why?

As part of Aatma Nirbhar Bharat package announced by the centre to deal Covid 19 blow, Prime Minister Narendra Modi stressed on becoming a more self reliant nation. And continuing on similar lines, to promote domestic manufacturing on Friday the government imposed curbs on imports of some of the new pneumatic tyres that are in use in motor cars, buses, motorcycles and lorries.

Tyre Stocks Are Up In Other Wise Weak Markets: Here's Why?

"Import policy of new pneumatic tyres...is amended from free to restricted," the Directorate General of Foreign Trade (DGFT) said in a notification

So, now an importer would need a license from the DGFT for imports.

Earlier, the import of these tyres were allowed without any restrictions.

The industry was long demanding restriction on imports and has also brought to light instances of higher imports from countries like China.

And post the move, tyre shares in today's trade (June 15, 2020) gained up to 10%. Shares of JK Tyre gained up to 10% with high of Rs. 65.70 per share made during the day. Similarly, Apollo Tyres, CEAT gained 5.6% and 5% each during intra-day trade today. MRF also moved up by 2.6% to Rs. 65400 per share on the BSE.

Meanwhile, tracking weakness in Asian and European markets on second wave of coronavirus infection is trading lower by 2%, with Nifty at 9775.

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