ASX 200 lithium shares are being bludgeoned on Friday following news out of Shanghai that lithium prices have fallen to their lowest level since January 2022.

Here is a summary of today’s share market activity:

• The Allkem Ltd (ASX: AKE) share price is down 7.2% to $11.56
• The Pilbara Minerals Ltd (ASX: PLS) share price is down 6.1% to $4.02
• The Liontown Resources Ltd (ASX: LTR) share price is down 6.2% to $1.59
• The Sayona Mining Ltd (ASX: SYA) share price is down 6% today to 24 cents
• The IGO Ltd (ASX: IGO) share price is down 6% to $12.98
• The Mineral Resources Ltd (ASX: MIN) share price is down 5.3% to $84.30
• The Core Lithium Ltd (ASX: CXO) share price is down 4.5% to 96 cents.

What’s behind the drop in ASX 200 lithium shares on Friday?

The Australian Financial Review (AFR) reports the lithium carbonate equivalent price has fallen to US$49,757 per tonne, according to Shanghai Metals Market data.

Lithium carbonate has been on a sustained decline since November 2022. Back then, the commodity was trading above US$86,100 per tonne. It has since lost 42% of its value.

Lithium prices are directly influenced by global demand for electric vehicles (EVs). Analysts are blaming China’s cessation of EV subsidies this year for the continuing slide in lithium prices.

Top broker Goldman Sachs has been bearish on lithium prices since mid-2022.

In its latest forecast released before today’s fall in the carbonate price, Goldman said all types of lithium would dramatically fall in value over the next few years.

The broker thinks supply will start to outweigh demand, thereby putting downward pressure on spot prices from 2H FY23.

Here are Goldman’s forecasted prices.

Carbonate (per tonne)

• Spot price today: US$49,757
• 2023: US$53,300
• 2024: US$11,000
• 2025: US$11,000

Hydroxide (per tonne)

• Spot price today: US$72,600
• 2023: US$58,650
• 2024: US$12,500
• 2025: US$12,500

Spodumene 6% (per tonne)

• Spot price today: US$5,080
• 2023: US$4,330
• 2024: US$800
• 2025: US$800

The post Why are ASX 200 lithium shares falling so hard today? appeared first on The Motley Fool Australia.

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More reading

• Sayona Mining share price dumps 6% amid lithium lows
• Why Atlantic Lithium, CBA, Piedmont Lithium, and Pilbara Minerals shares are dropping
• 3 ASX 200 shares trading ex-dividend today
• Novonix shares will soon be booted out of the ASX 200. What might this mean for investors?
• Investing $10k in this ASX stock could generate passive income of over $1k per year

Motley Fool contributor Bronwyn Allen has positions in Allkem and Core Lithium. 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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It has been another busy week for Australia’s top brokers. This has led to the release of a large number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Carsales.Com Ltd (ASX: CAR)

According to a note out of Macquarie, its analysts have retained their outperform rating and lifted their price target on this auto listings company’s shares to $25.10. This follows news that the company is increasing its stake in Brazil’s WebMotors to 70%. Macquarie appears pleased with the plan given how large the Brazilian market is. The Carsales share price last traded at $22.64.

Treasury Wine Estates Ltd (ASX: TWE)

A note out of Goldman Sachs reveals that its analysts have retained their buy rating and $14.70 price target on this wine giant’s shares. This follows the company’s FY 2023 strategy day in the Napa valley this week. Goldman believes that Treasury Wine is highly energised to generate growth in an otherwise challenged industry. It highlights that the company has its eyes on younger consumers, noting that the earlier they are recruited, the more loyal they become. The Treasury Wine share price is fetching $13.00 today.

Xero Limited (ASX: XRO)

Analysts at Citi have retained their buy rating and lifted their price target on this cloud accounting platform provider’s shares to $105.70. This follows news that Xero is undertaking a major cost cutting program that will reduce its workforce by upwards of 16%. Citi appears pleased with the news and is expecting this to underpin very strong earnings growth over the coming years. The Xero share price is trading at $86.26 this afternoon.

The post Brokers name 3 ASX shares to buy now appeared first on The Motley Fool Australia.

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More reading

• Is the new leaner, meaner Xero stock a buy right now?
• 5 things to watch on the ASX 200 on Friday
• Why Arafura, Myer, Volpara, and Xero shares are zooming higher
• Morgans names 3 more of the best ASX shares to buy in March
• Why is the Xero share price racing 11% higher today?

Motley Fool contributor James Mickleboro has positions in Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Carsales.com and Treasury Wine Estates. 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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The Sayona Mining Ltd (ASX: SYA) share price is down 6% today to 24 cents on news that lithium prices have fallen to their lowest level in more than a year.

The Australian Financial Review (AFR) reports the lithium carbonate equivalent price has fallen to US$49,757 per tonne, according to Shanghai Metals Market data.

The last time lithium traded at these levels was January 2022, according to Trading Economics.

Lithium is an essential ingredient in the batteries that power electric vehicles (EVs).

Analysts say this latest price slide is due to China ending EV subsidies this year.

The trouble with commodity stocks

Investors with money in commodity-related stocks know that when commodity prices move, so do share prices. So, it’s unsurprising to see plenty of other ASX lithium shares trading lower today.

• The Allkem Ltd (ASX: AKE) share price is down 7.2% to $11.56
• The Pilbara Minerals Ltd (ASX: PLS) share price is down 6.1% to $4.02
• The Liontown Resources Ltd (ASX: LTR) share price is down 6.2% to $1.59
• The IGO Ltd (ASX: IGO) share price is down 6% to $12.98
• The Lake Resources N.L. (ASX: LKE) share price is down 5.5% to 60 cents
• The Mineral Resources Ltd (ASX: MIN) share price is down 5.3% to $84.30
• The Core Lithium Ltd (ASX: CXO) share price is down 4.5% to 96 cents

But longer term, the future of EVs is rosy. According to a report published by Bloomberg, global spending on passenger EVs leapt 53% year over year to US$388 billion in 2022.

According to Bloomberg’s analysis, passenger EV sales will likely go beyond US$500 billion in 2023, up another 29% year-over-year.

That’s kinda significant for ASX lithium shares when you consider approximately 75% of the world’s consumption of lithium is in rechargeable batteries!

Other issues may be weighing on the Sayona Mining share price

Potentially also dragging on the Sayona Mining share price today are allegations made by a short-attacker against Sayona’s joint venture (JV) partner, Piedmont Lithium Inc (ASX: PLL).

Sayona and Piedmont are working on projects in Quebec through their JV, Sayona Quebec.

The trouble with Piedmont today relates to a short report from Blue Orca Research alleging Piedmont’s agreement to secure lithium spodumene supply in Ghana may be in jeopardy.

In terms of the Quebec JV, Sayona Mining gave some positive news to the ASX on Wednesday.

It announced that the JV’s flagship project, the North American Lithium Project, has produced initial spodumene concentrate.

Sayona Mining and Piedmont are currently working on restarting the project. They hope to be selling lithium product from the project in Q3 2023.

The post Sayona Mining share price dumps 6% amid lithium lows appeared first on The Motley Fool Australia.

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More reading

• Macquarie tips 3 ASX lithium shares to outperform, one with 150% upside
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Sayona Mining share price dips despite first lithium production
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Why InvoCare, Pentanet, Sayona Mining, and Weebit Nano shares are storming higher

Motley Fool contributor Bronwyn Allen has positions in Allkem and Core Lithium. 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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As an ASX 200 blue chip share, Woolworths Group Ltd (ASX: WOW) has a well-founded reputation as an investment that can deliver both capital gains and dividends to ASX investors. Indeed, Woolworths stock has delivered healthy amounts of both over the past decade or two: 

Today, this ASX consumer staples giant sits on top of Australia’s grocery and supermarket industry, with a higher market share and dominance over its rivals like Coles Group Ltd (ASX: COL).

But just because a company has been successful in the past does not mean it will automatically be a good investment going forward.

So today, let’s examine whether the Woolworths share price is a buy.

Buy Woolworths stock: ASX broker

Well, as you might have gathered from the headline, at least one ASX broker is bullish on Woolies shares today. As we covered this week, investment bank and broker Goldman Sachs recently came out with not just a buy rating on Woolworths, but a conviction buy rating.

Goldman has a strong view on Woolworths shares thanks to this business’ strong market position and digital prowess. The broker reckons these will enable Woolies to keep its perch at the top of the Australian grocery market and support higher margins in the future.

That’s good news for Woowlorths’ profitability if Goldman is on the money, which will in turn lead to higher dividends.

Goldman Sachs gives the Woolworths stock price a 12-month target of $41 a share. If realised, that would represent a potential upside of around 10.6% from where the shares are today, not including dividend returns.

Speaking of dividends, Goldman is also bullish on the future income potential of Woolworths shares. Today, Woolies has a trailing dividend yield of 2.67%, fully franked. That stems from the supermarket operator’s latest two dividend payments.

These include last year’s final dividend of 53 cents per share, as well as the interim dividend of 46 cents per share that investors will bag next month.

But Goldman reckons Woolies will be able to ratchet these payments up substantially in coming years. The broker has a total of $1.03 per share pencilled in for FY2023, and $1.16 per share for FY2024.

No doubt investors will be very happy to hear this news. But we’ll have to wait, watch and see if Goldman turns out to be on the money here.

The post Goldman Sachs says buy Woolworths stock for reliable dividends AND 10% share price growth appeared first on The Motley Fool Australia.

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More reading

• How can I hope to retire rich when the share market is falling?
• Buy these ASX 200 dividend shares for passive income: analysts
• Top ASX dividend shares to buy in March 2023
• Why is the Woolworths share price sliding lower today?
• Hoping to bag the bigger Woolworths dividend? You’ll need to hurry

Motley Fool contributor Sebastian Bowen 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 positions in and has recommended Coles Group. 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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If you’re in the market for some ASX dividend shares, then you might want to check out the two listed below.

These ASX dividend shares are on Morgans’ best ideas list for the month of March. Here’s why it rates them highly:

Telstra Corporation Ltd (ASX: TLS)

Telstra is on the broker’s best ideas list again in March with an add rating and price target of $4.70.

Morgans is very positive on the company due to the success of its turnaround and its recent restructure. It believes the latter could unlock value from asset divestments. It explained:

After a major turnaround, TLS has emerged in good shape with strong earnings momentum and a strong balance sheet. In late CY22 shareholders vote on Telstra’s legal restructure, which opens the door for value to be released. TLS currently trades on ~7x EV/EBITDA. However some of TLS’s high quality long life assets like InfraCo are worth substantially more, in our view. We don’t think this is in the price so see it as value generating for TLS shareholders. This, free option, combined with likely reputational damage to its closest peer, following a major cybersecurity incident, means TLS looks well placed for the year ahead.

As for dividends, the broker is forecasting fully franked dividends of 17 cents per share in FY 2023 and FY 2024. Based on the current Telstra share price of $4.12, this will mean yields of 4.1%.

Transurban Group (ASX: TCL)

Toll road operator Transurban could be another ASX dividend share to consider. Morgans has it on its best ideas list with a $14.21 price target.

Its analysts believe the company is an attractive option for investors given the quality of its assets and growth potential. The broker explained:

TCL owns a pure play portfolio of toll road concession assets located in Melbourne, Sydney, Brisbane, and North America. This provides exposure to regional population and employment growth and urbanisation. Given very high EBITDA margins, earnings are driven by traffic growth (with recovery from COVID) and toll escalation (roughly 70% by at least CPI and approximately one-quarter at a fixed c.4.25% pa). We think TCL will continue to be attractive to investors given its market cap weighting (important for passive index tracking flows), the high quality of its assets, management team, balance sheet, and growth prospects.

Morgans is forecasting dividends per share of 57 cents in FY 2023 and then 64.5 cents in FY 2024. Based on the current Transurban share price of $14.24, this will mean yields of 4% and 4.5%, respectively.

The post These are the best ASX dividend shares to own: Morgans appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Thursday
• How can I hope to retire rich when the share market is falling?
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Is now the time to buy Telstra shares for passive income?
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

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 positions in and has recommended Telstra Group. 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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The S&P/ASX 200 Index (ASX: XJO) is on course to end the week deep in the red. In afternoon trade, the benchmark index is down 1.95% to 7,168.7 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Atlantic Lithium Ltd (ASX: A11)

The Atlantic Lithium share price has crashed 20% to 52 cents. This has been driven by a short attack from Blue Orca. It alleges that Atlantic Lithium obtained key Ghana mining licenses by making secret payments and promises of payment to the immediate family of a high-level Ghana politician. Atlantic Lithium has denied these allegations.

Commonwealth Bank of Australia (ASX: CBA)

The CBA share price is down 3% to $95.93. Investors have been selling ASX bank shares on Friday after their US counterparts were sold off overnight on Wall Street. This was driven by concerns that rising interest rates could lead to large loan losses.

Piedmont Lithium Inc (ASX: PLL)

The Piedmont Lithium share price is down 6% to 82.5 cents. This is also due to the short attack from Blue Orca. It believes that Atlantic Lithium will lose its mining licences and not be able to supply Piedmont Lithium’s Tennessee facility. The company also denied this and believes it could find alternative spodumene if necessary.

Pilbara Minerals Ltd (ASX: PLS)

The Pilbara Minerals share price is down 6% to $4.02. Investors have been selling Pilbara Minerals and other ASX lithium shares today after the price of the battery making ingredient continued to fall. Prices have fallen so much now that, according to the AFR, benchmark prices have dropped to a one-year low in China.

The post Why Atlantic Lithium, CBA, Piedmont Lithium, and Pilbara Minerals shares are dropping appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 bank shares like CBA being annihilated today?
• Piedmont Lithium share price sinks following short attack response
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Macquarie tips 3 ASX lithium shares to outperform, one with 150% upside
• Piedmont Lithium share price frozen amid short-seller attack

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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S&P/ASX 200 Index (ASX: XJO) shares are taking a beating today, down 1.78% to 7,180.6 points at lunchtime.

The ASX 200 is falling after a poor trading session in the United States overnight. The Dow Jones Industrial Average Index (DJX: .DJI) fell by 1.66%, the S&P 500 Index (SP: .INX) dropped 1.85%, and the Nasdaq Composite Index (NASDAQ: .IXIC) was down by 2.05%.

However, the three ASX 200 shares below are also down today because they’re trading ex-dividend.

This means any investor who buys these ASX 200 shares today will not be entitled to the recently declared dividend.

Let’s take a look at the details.

Insignia Financial Ltd (ASX: IFL)

The Insignia Financial share price is down 4.7% to $3.08 at the time of writing.

The 1H FY23 report for this ASX 200 share revealed a $94.4 million underlying net profit after tax (NPAT). This was 17.1% down on the prior corresponding period (pcp).

Thus, there was a flow-on effect to dividends with an 11% cut pcp. Insignia Financial declared a 10.5 cent per share interim dividend with 50% franking payable on 3 April.

WiseTech Global Ltd (ASX: WTC)

The WiseTech share price is slipping 1.07% to $63.82 at lunchtime on Friday.

WiseTech reported a 40% increase in underlying NPAT to $108.5 million for 1H FY23. Its free cash flow also increased by 53% to $137.8 million.

The company declared a massively boosted interim dividend of 6.6 cents, up 39% pcp, fully franked. The ASX 200 company will pay shareholders on 6 April.

Downer EDI Ltd (ASX: DOW)

This ASX 200 share is in the red, too, down 0.5% to $3.28 at the time of writing.

The engineering and construction business reported a 20% drop in profit for 1H FY23. The company said its revenue was higher, but costs also increased due to bad weather, labour shortages, and other things.

The interim dividend was consequently slashed by 58% pcp to 5 cents per share unfranked. Downer will pay its shareholders on 11 April.

Possibly also contributing to the Downer share price dip today is an update from the Fitch Ratings agency.

Fitch affirmed its BBB credit rating on Downer and maintains a negative outlook.

The post 3 ASX 200 shares trading ex-dividend today appeared first on The Motley Fool Australia.

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More reading

• Novonix shares will soon be booted out of the ASX 200. What might this mean for investors?
• 5 things to watch on the ASX 200 on Friday
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Is the party well and truly over for ASX 200 coal shares?
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. 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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The S&P/ASX 200 Index (ASX: XJO) is not a static index. At its core, it is supposed to represent the largest 200 companies on the ASX share market by market capitalisation. That sounds simple enough. But companies’ market caps change all the time – essentially alongside share prices. 

So that makes coming up with a list of the ASX’s largest 200 companies at any one time a little fraught.

To get around this reality, the company that administers the ASX 200 Index – S&P Global – conducts what is known as a rebalance every three months. During a rebalance, the index provider notes which companies have lost value and which have gained value. It then reorders the ASX 200 to reflect what are the largest 200 companies at that time.

Inevitably, this leads to some ASX shares joining the Index, taking the place of those that no longer qualify for entry.

It just so happens that the latest quarterly rebalance for the ASX 200 is about to take effect. And one of the unlucky companies that is about to lose its ASX 200 membership is ASX battery technology company Novonix Ltd (ASX: NVX).

As my Fool colleague covered earlier this week, the latest ASX 200 rebalancing is set to come into effect on 20 March later this month. But to prevent any market shenanigans, S&P Global announces the changes well in advance.

Novonix shares are about to get the ASX 200 flick

So we already know that Novonix is about to get the boot from the ASX 200. It will join other soon-to-be former ASX 200 shares which include Adbri Ltd (ASX: ABC), Ramelius Resources Ltd (ASX: RMS) and Smartgroup Corporation Ltd (ASX: SIQ).

In their place, the ASX 200 will welcome Life360 Inc (ASX: 360), NRW Holdings Limited (ASX: NWH), Polynovo Ltd (ASX: PNV), and Syrah Resources Ltd (ASX: SYR).

So what does the loss of ASX 200 membership mean for Novonix investors?

Well, it’s hard to put a finger on exactly. In terms of the company itself, nothing will change. ASX 200 inclusion has little impact on the day-to-day operations of a company. However, it could lead to some share price changes.

ASX 200 inclusion can give a company greater access to investment. Any ASX fund managers only have mandates to invest in ASX 200 shares. And the fact that Novonix is leaving the ASX 200 Index means that any index funds that track the ASX 200 (of which there are many) will have to sell out of their Novonix position.

This selling pressure could lead to a lower share price for Novonix as demand for its shares slackens. So if Novonx investors notice a change in the share price movements of this company over the next few weeks (or even months), this could well be why.

But Novonix shareholders shouldn’t be too worried. As we mentioned earlier, this will change nothing at the company itself. And Novonix can always be readmitted to the Index at some point in the future if the company becomes more prosperous.

But, at least for now, Novnonix will have to be content as an All Ordinaries Index (ASX: XAO) share, rather than an ASX 200 member. 

The post Novonix shares will soon be booted out of the ASX 200. What might this mean for investors? appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 shares trading ex-dividend today
• 5 things to watch on the ASX 200 on Friday
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Is the party well and truly over for ASX 200 coal shares?
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360 and PolyNovo. The Motley Fool Australia has positions in and has recommended Smartgroup. 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a very disappointing note. At the time of writing, the benchmark index is down 1.7% to 7,184.3 points.

Four ASX shares that aren’t letting that stop them from climbing today are listed below. Here’s why they are pushing higher:

APM Human Services International Ltd (ASX: APM)

The APM share price is up almost 2% to $2.22. This morning, this human services company announced a new contract in North America worth $150 million. The new contract will see APM support phase two of the Ontario Employment Services Transformation.

Macquarie Telecom Group Ltd (ASX: MAQ)

The Macquarie Telecom share price is up almost 2% to $59.98. This is despite there being no news out of the telecommunication, cloud computing, cybersecurity and data centre services provider. However, it is worth noting that earlier this week, Goldman Sachs upgraded its shares to a buy rating with a $73.30 price target. It notes that the company is a “[p]ublic sector cloud & cybersecurity leader delivering robust, resilient growth.”

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price is up 2.5% to $10.64. A number of ASX gold shares are rising on Friday, which has taken the S&P/ASX All Ordinaries Gold index 1.4% higher this afternoon. Investors may be switching to safe haven assets given the current market volatility.

Origin Energy Ltd (ASX: ORG)

The Origin Energy share price is up 2% to $8.32. With no news out of the company, this could also be down to investors looking to escape the volatility with safe haven assets. Impressively, this means that the Origin share price has defied the odds and hit a 52-week high today despite the market selloff.

The post Why APM, Macquarie Telecom, Northern Star, and Origin shares are rising today appeared first on The Motley Fool Australia.

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More reading

• Uranium and gold: What are the best ASX shares to buy for these minerals?
• This ASX 300 director just loaded up on $2 million worth of her company’s shares
• 2 ASX 200 shares smashing new multi-year highs on Wednesday
• 5 things to watch on the ASX 200 on Wednesday
• 5 ASX 200 shares trading ex-dividend today

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 recommended APM Human Services International. 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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The BHP Group Ltd (ASX: BHP) share price is on course for a four-day losing streak on Friday.

As we barrel towards midday, shares in the mining giant are getting the cold shoulder from investors. The company’s share price is down a frosty 2.1% to $45.62 apiece amid a lacklustre performance from mining shares broadly. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is similarly wincing in pain with its own 1.54% fall.

The only companies within the ASX materials sector dodging the red today are gold miners such as Northern Star Resources Ltd (ASX: NST) and Evolution Mining Ltd (ASX: EVN).

This begs the question: why is the BHP share price under pressure today?

Where is the worry coming from?

As usual, the first place to look is at the company’s own announcements. Today, BHP has announced the resignation of John-Paul Santamaria as a company secretary.

The resignation is effective immediately with two other company secretaries remaining — Stefanie Wilkinson and Prakash Kakkad. No additional information about the resignation was provided within the release.

While such resignations can impact the share price, it is likely that economic news is putting pressure on the BHP share price. Namely the release of inflation figures from China overnight which painted a softer-than-expected economic environment.

Hopes had been high for a powerful rebound in activity in China following the lifting of its zero-COVID policy. This was the case in January, as its consumer price index (CPI) lifted 2.1% year-on-year. However, the data for February was a much weaker 1% increase compared to a year ago.

The data could be casting doubt over the return of strong demand for base metals such as copper, nickel, and iron. This information douses fuel on the fire of concern following remarks shared by United States Federal Reserve chair Jerome Powell a couple of days ago.

The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated. If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.

More monetary tightening than previously expected would intentionally constrict economic growth — a headwind for commodities. Keep in mind, iron ore and copper prices are still off by 18% and 14% respectively from a year ago.

Is the BHP share price lagging behind the index this year?

From an outperformer to an underperformer. It hasn’t been the best start to the year for BHP shares.

Initially, the BHP share price was on fire — soaring more than 10% higher throughout January. However, the momentum reversed during February as commodity prices steadied.

Shares in the company are now only 0.8% above where they finished 2022, while the benchmark is still holding onto a 3.4% rise.

The post Why is the BHP share price taking a flogging on Friday? appeared first on The Motley Fool Australia.

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More reading

• Here’s the BHP dividend forecast through to 2025
• Why 29Metals, BHP, Helia, and Rio Tinto shares are dropping today
• How can I hope to retire rich when the share market is falling?
• Why is the BHP share price sinking today?
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Mitchell Lawler 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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