Why are BHP shares off and racing on Monday?

The BHP Group Ltd (ASX: BHP) share price is rebounding on Monday after the iron ore giant gave up some serious gains late last week.

At the time of writing, shares in the world’s largest miner are up 2.16%, trading at $37.53.

For context, the S&P/ASX 200 Index (ASX: XJO) is 0.2% higher to 6,842.2 points.

Let’s look at what may drive the miner’s shares to race past the benchmark ASX 200 index today.

Why are BHP shares gaining ground?

There are a couple of likely reasons why the BHP share price is heading north during midday trade despite no company announcements.

Firstly, the S&P/ASX 200 Resources (ASX: XJR) sector is the second-best performing index across the ASX today, with a 1.42% gain at the time of writing.

This also sees shares in BHP’s iron ore rival Rio Tinto Ltd (ASX: RIO) lifting 1.05% to $91.14.

On the other hand, shares in Fortescue Metals Group Ltd (ASX: FMG) are currently down 5.23% after trading ex-dividend today.

Today’s strong turnaround for the benchmark index of Australian resource companies comes after a tumble of 8% since 26 August.

Recently, bearish sentiment impacted global markets following investor concerns about China’s property and COVID-19 crisis.

BHP shares retreated 7.61% last Thursday on the back of going ex-dividend. The share fell again 2.05% the following day, making it five days of consecutive losses.

However, those worries have been alleviated for now as several blue-chip shares trade in bargain territory.

BHP share price snapshot

Since the beginning of the year, the BHP share price has struggled to take off amid a challenging economic environment.

The mining giant’s shares are up 2% year-to-date but down 12% over the past week.

Based on today’s price, BHP has a market capitalisation of around $190 billion.

The post Why are BHP shares off and racing on Monday? appeared first on The Motley Fool Australia.

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More reading

• How I’d invest $50,000 in ASX dividend shares for retirement, if I had to start from scratch
• Why did the BHP share price smash the ASX 200 in August?
• 27% of ASX 200 shares cut dividends during earnings season. What’s next?
• Why are ASX 200 mining shares getting hammered on Friday?
• Is the BHP share price 7% cheaper after trading ex-dividend? 

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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