BHP share price bounces as materials outpace the ASX 200

The BHP Group Ltd (ASX: BHP) share price is on the move on Monday while the broader market also recovers.

At the time of writing, shares in the world’s largest miner are up 4.17% to $41.69.

For context, the S&P/ASX 200 Index (ASX: XJO) is 1.91% higher to 6,704.5 points at the time of writing.

Let’s take a look at what’s causing the miner’s shares to race past the benchmark ASX 200 index.

What’s up with BHP shares?

There are a couple of reasons as to why the BHP share price is heading north today.

First and foremost, the S&P/ASX 200 Materials Index (ASX: XMJ) is surging 2.55% to 16,039.8 points during early afternoon trade.

This represents a turnaround of more than 4% after the index hit a year-to-date low of 15,403 points last Friday.

Bearish sentiment impacted global markets from 8 June following investor concerns about a looming recession in the United States.

However, those worries have since been alleviated as the Federal Reserve indicated it will narrowly avoid an economic slump.

The turnaround in investor sentiment across the ASX has led other mining shares to also accelerate.

The Rio Tinto Ltd (ASX: RIO) and Fortescue Metals Group Ltd (ASX: FMG) share prices are up 2.85% and 4.34%, respectively.

Furthermore, the price for iron ore is fetching at US$116.50 per tonne. While down 10% in a month, there’s hope China will provide additional stimulus packages to spruce up its economy. This comes after the Asian powerhouse experienced a fall in GDP growth following harsh COVID-19 lockdowns in its most populous cities.

In essence, the financial support from the Xi government appears to have created a floor price for iron ore.

BHP share price snapshot

Since the start of 2022, the BHP share price has continued to move in circles after choppy economic conditions.

The mining giant’s shares are up 12.63% year-to-date, but down almost 3% in the past 12 months.

Listed as the biggest company on the ASX in terms of market capitalisation, BHP is approximately valued at $210 billion.

The post BHP share price bounces as materials outpace the ASX 200 appeared first on The Motley Fool Australia.

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More reading

• Broker sees 23% upside and a huge yield for BHP shares
• Why are ASX 200 mining shares having such a dire week?
• Own BHP shares? ‘Almost unbelievable’ breakthrough could be key to miner’s climate strategy
• Here’s the BHP dividend forecast through to 2024
• Here’s why the BHP share price is in the red today

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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