The S&P/ASX 200 Index (ASX: XJO) is on course to record another solid gain on Wednesday. In early afternoon trade the benchmark index is up 0.8% to 5,883.8 points.

Four shares that have climbed more than most today are listed below. Here’s why they are charging higher:

The Afterpay Ltd (ASX: APT) share price is up 3.5% to $51.22. At one stage today the payments company’s shares were up as much as 5.5% to a new record high of $52.29. Investors have been buying Afterpay’s shares after rival Zip Co Ltd (ASX: Z1P) announced its expansion into the lucrative U.S. market via the acquisition of QuadPay. While this will mean added competition, it may also help raise awareness of the payment method and accelerate its adoption with consumers and merchants.

The Infigen Energy Ltd (ASX: IFN) share price has surged 35% higher to 79.5 cents. Investors have been buying the renewable energy company’s shares after it received a takeover approach. UAC Energy, an investment holding company owned by the AC Energy Group and UPC Renewables Australia, intends to make an off-market takeover bid of 80 cents per share.

The Qantas Airways Limited (ASX: QAN) share price is up 5% to $4.19. This appears to have been driven by a broker note out of UBS this morning. According to the note, UBS has retained its buy rating and $4.65 price target on the airline operator’s shares. It appears optimistic that leisure and corporate travel markets will be given a big boost when state borders reopen.

The Zip Co share price has surged 25% higher to $6.48. Investors have been scrambling to buy the payments company’s shares after it announced that it is expanding into the U.S. market with the acquisition of QuadPay. The all-scrip deal, which values QuadPay at approximately $400 million, will give Zip Co access to a retail market estimated to be worth US$5 trillion per year.

More reading

• ASX 200 up 1%: Big four banks jump, Afterpay hits record high
• The Zip Co share price just zoomed to a record high: Is it too late to invest?
• Infigen Energy share price rockets 36% higher following takeover bid
• Afterpay and these top ASX tech shares are on fire in 2020
• ASX 200 rises 0.3%, Zip rockets higher

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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At lunch on Wednesday the S&P/ASX 200 Index (ASX: XJO) is on course to record a very strong gain. The benchmark index is up 1% to 5,894.9 points at the time of writing.

Here’s what is happening on the ASX 200 today:

Afterpay hits a record high.

The Afterpay Ltd (ASX: APT) share price has been a positive performer on Wednesday. Its shares jumped 5.5% to a record high of $52.29 this morning. Investors have been buying its shares after rival Zip Co Ltd (ASX: Z1P) announced its expansion into the lucrative U.S. market via the acquisition of QuadPay. Investors may believe the increased competition will accelerate the adoption of buy now pay later platforms in the multi-trillion dollar market.

Big four banks jump.

It has been a very positive day for Westpac Banking Corp (ASX: WBC) and the rest of the big four banks. All four banks are trading notably higher at lunch and are playing a key role in driving the ASX 200 higher. The best performer in the group at lunch is the Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price. Its shares are up 4% at the time of writing. This morning the Australian Bureau of Statistics revealed that GDP fell 0.3% during the first quarter. This was in line with expectations.

Gold miners sink lower.

One area of the market acting as a drag on the ASX 200 index today is the gold sector. The likes of Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Limited (ASX: NCM) are all trading notably lower at lunch. This follows a reasonable pullback in the gold price overnight. The price of the precious metal tumbled after Wall Street began betting on a successful economic restart. At lunch the S&P/ASX All Ordinaries Gold index is down 4.4%.

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Wednesday has been the SKYCITY Entertainment Group Limited (ASX: SKC) share price with a 9.5% gain. This morning the casino and resorts operator revealed that its New Zealand operations have performed well since reopening. The worst performer on the ASX 200 is the Silver Lake Resources Limited (ASX: SLR) share price. Silver Lake’s shares are down 7% after the gold price decline.

More reading

• The smartest ASX 200 shares to buy with $2,500 today
• Why Afterpay, Infigen, Qantas, & Zip Co shares are charging higher
• Are our ASX big miners on an earnings upgrade cycle?
• Can ASX 200 retail shares outperform this year?
• 1 ASX 200 tech share to buy and hold for a decade

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sky City Entertainment Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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Our largest miners may be in a cum-upgrade cycle that could see their share prices keep outperforming for a little longer yet!

We have Brazil to thank for this as the country’s poor management of the COVID-19 pandemic will curtail its iron ore exports.

Australia’s ability to flatten the coronavirus curve is giving the BHP Group Ltd (ASX: BHP) share price, Rio Tinto Limited (ASX: RIO) share price and Fortescue Metals Group Limited (ASX: FMG) share price an advantage.

I reckon these ASX miners are on an earnings upgrade cycle.

The Brazilian advantage

Brazil’s biggest iron ore miner Vale SA told the Australian Financial Review that its mines are running on a skeleton crew and that it’s license to operate is under “extreme pressure” from authorities.

Vale is not only sending home workers who tested positive for the virus, but anyone who had contact with the infected employee.

Meanwhile, the miner was forced to turn to the courts on Friday to keep its Itabira mining hub open after government officials tried to close it on the belief that the hub is a source of infections.

Broker upgrade

The escalating COVID-19 crisis in the Latin American country prompted Goldman Sachs to upgrade its iron ore forecast for 2020.

The broker thinks Vale will only be able to hit the low end of its production guidance in 2020, which will leave the iron ore market short of supply.

“We now expect Vale to sell 311Mt [million tonnes] of iron ore vs. guidance of 310-330Mt and for China steel production to grow by 0.4% to 998Mt but for steel production to peak mid-year and then moderate in 2H,” said the broker.

Iron ore forecasts for 2020 and 2021

Goldman Sachs is now forecasting the price of the steel making ingredient to average US$86 a tonne this year and US$80 a tonne in 2021. That’s about 7% to 8% higher than its original estimate.

What this translates to is a 12% upgrade to Fortescue’s earnings per share (EPS) forecast for both FY21 and FY22. Rio’s FY20 EPS gets boosted by 10% while BHP’s FY21 EPS enjoys an 8% lift.

“We forecast an average FCF [free cash flow] yield of 7-9% for the BHP and RIO over the next 3 years,” said Goldman.

“We think that copper production could disappoint over the next 12-18 months for both stocks, however, capex guidance could positively surprise and FCF should remain very attractive.”

Which ASX miner should you buy?

The broker is recommending BHP and Rio as “buy” but is keeping its “hold” rating on Fortescue after the stock’s big recent surge to a record high.

Goldman’s price target on BHP is $37.80, Rio Tinto $101.10 and Fortescue $12.10 a share.

I am expecting other brokers to be lifting their earnings forecasts on the sector too. Let the ASX miner earnings upgrade cycle begin!

More reading

• The smartest ASX 200 shares to buy with $2,500 today
• ASX 200 up 1%: Big four banks jump, Afterpay hits record high
• Can ASX 200 retail shares outperform this year?
• 1 ASX 200 tech share to buy and hold for a decade
• JobMaker is coming. These 3 ASX 200 shares could benefit

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited and Rio Tinto Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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