Why is the Lake Resources share price leaping 11% today?

The Lake Resources N.L. (ASX: LKE) share price is charging into the green during afternoon trading on Monday.

At the time of writing, the lithium miner’s shares are swapping hands 11.29% higher at $1.04.

In broad market moves, the S&P/ASX 200 Materials Index (ASX: XMJ) is also up more than 180 basis points on the day.

What’s up with Lake Resources lately?

Investors have bid up Lake Resources shares today on no news. Despite this, there are various supportive factors in place.

Firstly is the price of lithium – it still trades near record highs, having held the fort over the past few months while most other commodity markets whipsawed.

It remains up 430% year on year. The reopening of Shanghai in China from lockdowns “prompted a 129% annual and 63% monthly surge in new energy vehicles sales during June,” Trading Economics says.

“The increase in turnover followed the rewarding of cash subsidies by local Chinese governments including Beijing, Shanghai, and Wuhan, for customers replacing petrol cars with new EV purchases,” it added.

Both of these moves have been accretive to the price of lithium these past few weeks.

Meanwhile, ASX materials and mining shares have caught a bid lately, surging back towards previous highs.

Judging from the chart below, which looks at the Lake Resources share price versus the ASX materials and mining benchmarks this year to date, strength and/or weakness in these sectors is resembled in the stock as well.

All three instruments are seeing some upside after finding a bottom in July. The question is then, where to next for the Lake Resources share price. In reality, only the market will decide.

Lake Resources share price snapshot

Lake shares have clipped a 57% gain in the past 12 months. Though most of those gains can be attributed to the last month.

While the Lake Resources share price has seen a gain of only 2.48% year to date, it has gained 28% in the last week and 48% in the last month.

The post Why is the Lake Resources share price leaping 11% today? appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares
• Why did the Lake Resources share price lag the ASX 200 in July
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Here are the top 10 ASX 200 shares today
• Why are ASX lithium shares having such a top run on Wednesday?

Motley Fool contributor Zach Bristow 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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