Asia tyre shares up on U.S. rebate extension hope

TOKYO, Aug 3 (Reuters) - Shares of Japan's Bridgestone (5108.T: Quote, Profile, Research) and other Asian tyre makers powered higher on Monday on hopes the United States would extend its "cash for clunkers" auto rebate programme, which is expected to boost car sales and thus spur more demand for tyres, 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. [nN02342820]

As of 0506 GMT shares in Bridgestone, Japan's largest tyre maker, were up 5.1 percent while South Korea's Hankook Tire Manufacturing Co (000240.KS: Quote, Profile, Research) jumped 5.6 percent and China's largest tyre maker Giti Tire Corp (600182.SS: Quote, Profile, Research) climbed 4.6 percent.

The index of Tokyo rubber stocks rose 4 percent to become the biggest percentage gainer among subindexes. "Gains in tyre makers are likely linked to the news about the U.S. auto sales aid programme. 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 tyres sell well."

Ford Motor Co (F.N: Quote, Profile, Research) said on Sunday its July sales made their first year-on-year monthly gain since November 2007, aided by a surge in "clunker" business. [nN02484532]

(Reporting by Aiko Hayashi; Editing by Michael Watson)

((aiko.hayashi@thomsonreuters.com; Reuters Messaging: aiko.hayashi.reuters.com@reuters.net; +81 3 6441 1802))

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