The Fortescue Metals Group Limited (ASX: FMG) share price has opened the session strongly.
In early trade, the iron ore giantâs shares are up 3.5% to $17.37.
Why is the Fortescue share price charging higher?
There have been a couple of catalysts for the gains by the Fortescue share price on Friday.
One is a strong showing in the resources sector. For example, the S&P/ASX 200 Resources index is up 1.5% at the time of writing.
This compares favourably to the 0.1% gain being recorded by the ASX 200 index. In fact, if you were to take the resources gains out of the equation, the benchmark index would almost certainly be in the red.
Also giving the Fortescue share price a lift on Friday has been the iron ore price. With the company currently generating all its revenue from its iron ore operations, its shares are heavily influenced by the iron ore price.
The good news for shareholders is that, according to CommSec, the benchmark iron ore price climbed 3% or US$2.91 a tonne to US$100.09 a tonne overnight.
This was driven by positive news out of China relating to the restart of major housing projects in Zhengzhou. Traders appear to believe this will lead to increased demand for the steel-making ingredient.
The post Why is the Fortescue share price bolting out the gate on Friday? appeared first on The Motley Fool Australia.
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More reading
- Fortescue share price strengthens amid boost in Chinaâs iron ore appetite in August
- Why are ASX 200 mining shares getting blasted on Wednesday?
- The Fortescue share price has cratered 13% in a week. Whatâs going on?
- Could this be a blow to the fortunes of Fortescue Future Industries?
- Can you buy shares in Fortescue Future Industries?
Motley Fool contributor James Mickleboro 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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