Asia tire shares up on U.S. rebate extension hope
TOKYO (Reuters) - Shares of Japan's Bridgestone (5108.T) and other Asian tire makers powered higher on Monday on hopes the United States would extend its "cash for clunkers" auto rebate program, which is expected to boost car sales and thus spur more demand for tires, market players said.
The U.S. Senate is considering a $2 billion extension after the initial $1 billion funding promptly ran out, and the Obama administration expressed optimism the extension would go through. Under the plan, consumers receive up to $4,500 when they trade in old cars for more fuel-efficient new ones.
As of 1:06 a.m. EDT shares in Bridgestone, Japan's largest tire maker, were up 5.1 percent while South Korea's Hankook Tire Manufacturing Co (000240.KS) jumped 5.6 percent and China's largest tire maker Giti Tire Corp (600182.SS) climbed 4.6 percent.
The index of Tokyo rubber stocks .IRUBR.T rose 4 percent to become the biggest percentage gainer among subindexes.
"Gains in tire makers are likely linked to the news about the U.S. auto sales aid program. Sales of fuel-efficient cars have been pretty solid so far," said Hajime Nakajima, deputy general manager at Cosmo Securities.
"In the end, if cars sell well tires sell well."
Ford Motor Co (F.N) said on Sunday its July sales made their first year-on-year monthly gain since November 2007, aided by a surge in "clunker" business.
(Reporting by Aiko Hayashi; Editing by Michael Watson)
