Rumours that President Bush will try to limit asbestos liability have reignited interest in shares in chemical companies.

In recent months, the amount that companies will have to pay out in damages has sent shares in companies such as Dow Chemical and Halliburton tumbling.

However, in recent days, these shares have been buoyed by speculation that the government would soon impose limits on asbestos liability.

President George W Bush is expected to focus on the war against terrorism, security and the US economic recession in his first State of the Union address later on Tuesday.

High exposure

"There are rumours the president is going to discuss asbestos [in his State of the Union speech] and talk about liability limitations, which is something we need or we're not going to have Corporate America anymore," said Seth Tobias, a money manager for Circle T Partners said on Friday, when the rumours first emerged.

"Nearly 40% of the Dow average has asbestos exposure," Mr Tobias added.

Lawyers say there have been few previous cases of limited liability - except in the case of bankruptcy.

"These rumours have been put out by some corporate representatives that Dubya and his administration have some very close contacts with," Randall Bono, a lawyer representing asbestos victims, told the BBC's World Business Report.

"It seems likely that he will want to try and help his political contributors and his corporate friends."