Why is the Arafura share price rocketing 8% today?

The Arafura Resources Limited (ASX: ARU) share price is among one of the best performers on the ASX today.

This comes despite the company not releasing any announcements to the market since its presentation at the Emerging Leaders Conference.

At the time of writing, the rare earth developer’s shares are up 8.22% to a 3-month high of 39.5 cents.

Let’s take a look at what is driving this charge behind Arafura shares.

What’s pushing Arafura shares into positive territory?

In a sea of red across the ASX Indices, the S&P/ASX 200 Materials Index (ASX: XMJ) is heading the opposite direction to climb 0.88%.

A number of ASX shares in the lithium and critical minerals industry are gaining ground because of the quarterly rebalance that takes effect today.

The S&P Dow Jones Indices announced the S&P/ASX Indices changes at the beginning of this month.

The inclusion of Arafura in the S&P/ASX 300 Index provides a much-welcomed boost for the company’s shares.

This is because fund managers must abide by their investing mandate which permits them to only buy shares included in specific indices.

Each index comprises a number of companies that have the largest market capitalisation of that group.

Arafura share price recap

From September 2021 to March this year, the Arafura share price moved in circles trading in the mid-teens range.

However, its shares rocketed by more than 130% in the following days of the company being granted a government award.

After hitting a multi-year high of 50 cents in June, Arafura shares have come back down to trade around under 40 cents.

Year-to-date, the share is up 83%.

Based on today’s price, Arafura presides a market capitalisation of approximately $629.47 million.

The post Why is the Arafura share price rocketing 8% today? appeared first on The Motley Fool Australia.

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More reading

• 3 ASX All Ordinaries shares having a cracking Monday
• The Arafura Resources share price is down 7% this morning
• Why investors might be getting excited about Arafura shares
• Arafura defies sell-off in ASX mining shares to stay buoyant. Is this why?
• 3 ASX mining shares that rocketed more than 15% on Monday

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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