The S&P/ASX 200 Index (ASX: XJO) is back on form on Tuesday and is charging notably higher. In afternoon trade, the benchmark index is up 1.2% to 6,799.7 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

Accent Group Ltd (ASX: AX1)

The Accent share price is down 5% to $1.27. This is despite there being no news out of the footwear focused retailer on Tuesday. This latest decline means the Accent share price is now down by a disappointing 49% since the start of the year. Investors appear concerned what impact a recession could have on its sales.

Bigtincan Holdings Ltd (ASX: BTH)

The Bigtincan share price is down over 4% to 55.5 cents. Investors have been selling this sales enablement software platform provider’s shares despite the release of a positive business update. That update reveals that Bigtincan has successfully locked in 43% of FY 2022’s annual recurring revenue (ARR) of $120.1 million through to the end of FY 2023. This compares to 31% at a similar stage a year earlier.

Clinuvel Pharmaceuticals Limited (ASX: CUV)

The Clinuvel share price has continued its slide and is down 3% to $19.37. Investors have been selling this biopharmaceutical company’s shares this week after they were dumped out of the ASX 200 index at the quarterly rebalance. The release of its latest strategy update has also failed to get investors excited.

IVE Group Ltd (ASX: IGL)

The IVE share price is down 4% to $2.29. This morning this printing company announced the completion of an institutional placement. IVE has raised $18 million via the issue of 8 million shares at $2.25 per new share. The capital raising will preserve significant balance sheet capacity for IVE following a recent acquisition. This balance sheet strength will be used to pursue previously announced growth initiatives including further organic initiatives or acquisitions.

The post Why Accent, Bigtincan, Clinuvel, and IVE shares are dropping today appeared first on The Motley Fool Australia.

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More reading

• Why Clinuvel, EML, Infomedia, and Link shares are dropping today
• The ASX 200 is getting a shakeup today. Here’s the tea
• Out in the cold: How are the ASX 200 evictees faring on Monday?
• Experts say these top ASX dividend shares are buys
• 2 exciting small cap ASX shares analysts rate highly

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 positions in and has recommended BIGTINCAN FPO. The Motley Fool Australia has positions in and has recommended BIGTINCAN FPO. The Motley Fool Australia has recommended Accent 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 Dogecoin (CRYPTO: DOGE) price is up 2% over the past 24 hours to 5.85 US cents.

That gives the crypto, which sports a Shiba Inu dog as its virtual mascot, a market cap of US$7.75 billion.

And that’s enough to vault Dogecoin back into the number 10 spot on the list of top global cryptos, nudging ahead of Polkadot (CRYPTO: DOT), with a total market valuation of US$7.04 billion.

Though it should be said that this is more due to Polkadot’s weakness than any huge surge in the Dogecoin price.

Despite today’s bump, Dogecoin remains down 8% since this time last week. Polkadot has slid by 17%, according to data from CoinMarketCap.

Dogecoin now the second biggest crypto to operate on PoW

Last week Ethereum (CRYPTO: ETH) finally completed its long-awaited merge.

That merge now sees the network operating on a proof of stake (PoS) protocol versus the previous proof of work (PoW).

The switch entails validators staking some of their Ether to participate in verifying transactions and securing the blockchain. One of the biggest immediate advantages is a 99% plus reduction in the amount of energy used, as PoS requires far fewer energy-hungry computers.

With Ethereum exiting PoW, and the Dogecoin price rise edging it back to the number 10 spot, the meme token is now the second biggest crypto to operate on PoW. Bitcoin (CRYPTO: BTC), with a market cap of US$369.95 billion, remains the, erm, top dog in PoW protocols.

Where to next for the Dogecoin price?

It remains to be seen how cryptos operating under PoW will fare over the coming year. Part of that will depend on what issues may yet crop up for Ethereum under its new PoS system.

More immediately, the Dogecoin price could face a big move higher or lower after the US Federal Reserve announces its next interest rate decision on Wednesday (overnight Aussie time).

Equity and crypto markets have broadly priced in a 0.75% rate hike. But if the Fed opts to go harder sooner with a 1% rate boost in the world’s biggest economy, risk assets will likely take a hit. Should the Fed surprise with a lower rate hike, the Dogecoin price will likely benefit.

The post Dogecoin price gains send it back among top 10 global cryptos appeared first on The Motley Fool Australia.

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More reading

• Why Bitcoin, Dogecoin, and Shiba Inu fell this morning
• What’s supporting the Dogecoin price in September?
• Why did the Dogecoin price tumble 12% in August?
• Why Ethereum, Dogecoin, and Solana lost altitude on Thursday
• Why Bitcoin, Ethereum, and Dogecoin are falling today

Motley Fool contributor Bernd Struben 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 Bitcoin and Ethereum. The Motley Fool Australia has positions in and has recommended Bitcoin and Ethereum. 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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This week is gearing up to be a massive one for ASX dividend investors, with more than $18 billion worth of payouts said to be hitting bank accounts.

And the best is yet to come, with some of the S&P/ASX 200 Index (ASX: XJO)’s highest yielding companies set to hand out their upcoming dividends tomorrow.

Let’s take a look at the billions of dollars set to be handed out to Aussie dividend fans over the remainder of this week.

The ASX 200 shares paying out nearly $15b of dividends this week

Financial year 2022 was another big one for dividends.

Analysis by CommSec found ASX 200 companies declared more than $42 billion worth of dividends in August.

And ASX shares will hand out $18 billion this week according to Bell Potter’s Richard Coppleson, courtesy of the Australian Financial Review.

This week’s biggest payer is none other than BHP Group Ltd (ASX: BHP). The ASX’s largest company declared a whopping $2.55 per share dividend, worth more than $12 billion in total.

That’s set to hit investors’ bank accounts tomorrow alongside Rio Tinto Limited (ASX: RIO)’s upcoming $3.847 per share interim payout.

That will see Rio Tinto handing out a total of around $1.4 billion to its Aussie investors on Wednesday.

Of course, the company’s investors might still be lamenting the smaller offering. The iron ore favourite slashed its latest payout by 52% year on year.

Looking beyond materials shares, fan favourite Telstra Corporation Ltd (ASX: TLS) is set to drop 8.5 cents of dividends per share tomorrow.

That offering incorporates a 7.5 cent final dividend and a 1 cent special dividend, worth around $980 million.

Telstra’s offering was scheduled to be paid out on Thursday but was brought forward after the day was declared a national day of mourning to commemorate Queen Elizabeth II.

Finally, ASX 200 energy giant Santos Ltd (ASX: STO) is also gearing up to hand out its 10.93 cents per share dividend on Wednesday. That’s worth around $366 million and represents a 38% year-on-year improvement.

Those mark a few of the ASX giants paying out dividends this week. And market watchers might want to hold onto their hats next week too.

Commonwealth Bank of Australia (ASX: CBA), Fortescue Metals Group Limited (ASX: FMG), and Woolworths Group Ltd (ASX: WOW) will pay out nearly $8 billion between them then.

The post $18 billion of ASX dividends are being paid out this week. Here’s the lowdown appeared first on The Motley Fool Australia.

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More reading

• Here’s what this top broker is saying about the BHP share price
• Could this prove to be a new cash cow for Telstra shares?
• ‘Bullish sign’: Expert names 2 rising ASX shares to buy right now
• 5 things to watch on the ASX 200 on Tuesday
• Broker names 2 of the best ASX shares to buy now

Motley Fool contributor Brooke Cooper 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 Corporation Limited. 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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After suffering the last two trading days, the Vulcan Energy Resources Ltd (ASX: VUL) share price is back in the green today.

The clean lithium developer’s shares stumbled 1.60% and 2.25% on Friday and Monday, respectively.

But, with broader gains being achieved across the market today, Vulcan shares are currently up 1.02% to $7.90 apiece after hitting an intraday high of $8.23 a share, a gain of more than 5%.

What’s powering Vulcan Energy shares ahead on Tuesday?

Investors are bidding up the Vulcan Energy share price as the wider sector recovers from the volatility that’s occurred over the past two weeks.

As the S&P/ASX 200 Index (ASX: XJO) is 1.19% higher in late afternoon trading. The benchmark index is following Wall Street’s lead after US equities recorded modest gains overnight.

It appears the market has now factored in the upcoming interest rate hike by the US Federal Reserve.

Economists are expecting the central bank to lift interest rates by up to 100 basis points in an ongoing bid to cool down inflation.

The latest US CPI data showed inflation rose by 0.1% on a monthly basis and 8.3% over the last 12 months.

Also providing support today is the S&P/ASX 200 Materials (ASX: XMJ) sector which is the second-best performing index.

The sector is up 2.35%, slightly behind the leader, the S&P/ASX 300 Metals and Mining Index (ASX: XMM), up 2.42%.

Vulcan Energy share price snapshot

Bearish sentiment mixed with volatility has led the Vulcan Energy share price to fall 46% over the last 12 months.

The company’s shares reached an all-time high of $16.65 in September 2021, before moving on a downward channel.

Whether it can regain these highs largely depends on the price of lithium as well as Vulcan Energy’s progression on its Zero Carbon Lithium Project.

Based on today’s price, Vulcan Energy commands a market capitalisation of around $1.13 billion.

The post Why is the Vulcan Energy share price lifting today? appeared first on The Motley Fool Australia.

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• The Vulcan share price sank 7% today in ASX sea of red
• How are ASX lithium shares faring amid Wednesday’s carnage?
• Why Allkem, MA Financial, Neuren, and Vulcan Energy shares are pushing higher
• Here’s the lithium price forecast through to 2024
• Vulcan Energy share price up 5% on lithium project update

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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The S&P/ASX 200 Index (ASX: XJO) has rebounded strongly on Tuesday. In afternoon trade, the benchmark index is up 1.2% to 6,799.7 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are racing higher:

Brickworks Limited (ASX: BKW)

The Brickworks share price is up 6% to $21.69. Investors have been buying the building materials company’s shares for a couple of reasons. One was the release of a strong result from a coal miner (see below) that Brickworks is a major shareholder of. In addition, this morning Morgans upgraded its shares to an add rating with a $23.00 price target.

IDP Education Ltd (ASX: IEL)

The IDP share price is up 2% to $28.19. This morning this language testing and student placement company announced a new acquisition. IDP has signed an agreement to acquire 100% of Intake Education for up to ~A$83 million. Intake is a leading student placement agency that has operations across Nigeria, Ghana, Kenya, Philippines, Thailand, Taiwan, India and the UK.

IGO Ltd (ASX: IGO)

The IGO share price is up almost 5% to $14.95. Investors have been buying this battery materials miner’s shares following the release of an update on one of its lithium operations. According to the release, an increasing number of pegmatite outcrops have been identified by field mapping across the 15km zone of pegmatite dykes at the Mt Alexander project in Western Australia.

New Hope Corporation Limited (ASX: NHC)

The New Hope share price is up over 8% to $5.93. This morning this coal miner released its full year results and revealed a 143% increase in revenue to $2.55 billion and a massive 1,139% jump in net profit after tax to $983 million. This allowed the coal miner to declare a fully franked 31 cents per share final dividend and a 25 cents per share special dividend. Combined, this was an impressive 700% year over year increase from FY 2021’s 7 cents per share final dividend.

The post Why Brickworks, IDP Education, IGO, and New Hope shares are racing higher appeared first on The Motley Fool Australia.

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More reading

• Here’s why the IGO share price is firing 5% on Tuesday
• Everything you need to know about the monster New Hope dividend
• Why is the Brickworks share price racing 6% higher today?
• Here’s why the IDP Education share price is charging higher
• New Hope share price leaps 8% as profit skyrockets

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 positions in and has recommended Brickworks and Idp Education Pty Ltd. The Motley Fool Australia has positions in and has recommended Brickworks. 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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Some Australians could slow their spending in the months to come amid stagnant wages and cost increases for necessities, according to a UBS analyst.

As reported by The Australian, UBS analyst Shaun Cousins says lower and middle-income earners could tighten their purse strings. But those who earn $120,000 or more a year will keep burning through the savings they accumulated during the pandemic.

Notably, Cousins says this means retailers that attract higher net worth clientele, such as S&P/ASX 200 Index (ASX: XJO) favourites Harvey Norman Holdings Limited (ASX: HVN) and Lovisa Holdings Ltd (ASX: LOV), could be less affected by fiscal tightening.

The other side to this is that more value-oriented ASX 200 retailers like JB Hi-Fi Limited (ASX: JBH) could see a drop in sales as bargain hunters start to feel the bite of a rising cost of living.

The effects are unlikely to be felt immediately. But they could start to add up from November onwards and culminate in a slowdown in February next year.

Cousins said:

The Australian consumer is facing significant headwinds from the rising cost of living across energy, food, fuel and interest rates, with house prices falling.

These headwinds have yet to weigh on spending with the strong labour market – low unemployment and rising wages despite falling purchasing power – and elevated recent household savings key supports as the consumer returns to traditional spending patterns and engages in catch-up spend after difficult years with Covid.

Cousins continued:

We fear a slowdown in spending from November onwards, with the fuel excise, cumulative impact of the rising cost of living. If the consumer remains buoyant in November we suggest Christmas will also be strong with the prospect spending slows from February 2023 onwards as the rising cost of living headwinds bite.

Consumer confidence rises along with the official cash rate forecast

The vast majority of people surveyed as part of the ANZ Roy Morgan Consumer Confidence index are positive about the prospects for their jobs and the economy at large. This may entice high-income earners to keep spending at premium retailers, The Australian reported.

The index gained 0.4% last week and currently stands at 86.

However, some dark clouds could form over this important benchmark. ANZ Roy Morgan head of Australian economics David Plank believes the rise in consumer confidence results from a “misplaced” interpretation of RBA commentary that the next rate hike in October may not be as severe.

Plank said:

This may indicate that people with mortgages have taken comfort from the recent commentary that the RBA might scale back the size of rate increases in October. We think that commentary is misplaced and expected another 50bp from the RBA in October. This might come as something of a shock for those with mortgages.

Meanwhile, UBS raised its expectations for the cash rate peak to 3.1% from 2.85%. This suggests further work is needed to get inflation back under control, the article said.

The cash rate is currently 2.35%.

The post What’s the outlook for ASX 200 retail shares as inflation begins to bite? appeared first on The Motley Fool Australia.

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• 5 ASX retail shares spruiking the highest dividend yields right now
• The ‘in’ crowd: How are the ASX 200 newcomers performing today?
• The ASX 200 is getting a shakeup today. Here’s the tea
• Here’s why this ASX 200 retail share is on my buy radar
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Matthew Farley 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 Harvey Norman Holdings Ltd. The Motley Fool Australia has positions in and has recommended Harvey Norman Holdings Ltd. The Motley Fool Australia has recommended JB Hi-Fi Limited and Lovisa Holdings Ltd. 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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2022 hasn’t been a kind year for most ASX tech shares.

At least, not yet.

Technology companies are often priced with distant future earnings in mind. Meaning they’ve been particularly vulnerable to rising interest rates, which drive up the present-day cost of investing in those future earnings.

To give you some idea of the headwinds facing ASX tech shares this year, the S&P/ASX All Technology Index (ASX: XTX) is down 31% since the opening bell on 4 January. That’s far steeper than the 11% loss posted by the All Ordinaries Index (ASX: XAO).

But not all technology stocks have lost ground in 2022.

Share price up on revenue and earnings growth

Atturra (ASX: ATA) counts among the ASX tech shares bucking the trend, with the share price up 25% year-to-date.

Atturra is a relative newcomer to the ASX, listing on 22 December 2021. The company provides a range of enterprise advisory, consulting, and IT services and solutions to government and corporate entities.

The company released its first FY22 results as a listed entity on 30 August.

Among the highlights, the newly minted ASX tech share reported a 29% year-on-year increase in earnings before interest and tax (EBIT) of $12.4 million.

FY22 revenue reached $134.6 million, up 37% from the prior year. And Atturra held $35 million in cash at hand as at 30 June, with a debt of $4.8 million.

These are among the reasons that 1851 Capital’s Chris Stott told Livewire, “We’ve gone with Atturra,” when asked for a microcap stock that can take advantage of the current conditions and “really set itself up for the coming years”.

Why this small-cap ASX tech share ‘stands out’ right now

According to Scott, the recently listed ASX tech share “trades on seven times EBIT… So, it’s doing very well in terms of, it’s performed well since its listing.”

Scott added:

It’s got $30 million of net cash on the balance sheet. It’s been upgrading its earnings since the listing. So, [a] very well managed little IT services business, off the radar. Not many institutions on the register, not well covered by the stock broking community. So that one stands out for us right now.

How has this ASX tech share been performing?

Up 25% this year to 75 cents per share, the Atturra share price reached all-time highs of 84 cents on 7 June.

Over the past month, the ASX tech share has gained 12%, compared to a 4% loss posted by the All Tech Index.

The post Why this small-cap ASX tech share ‘stands out’ right now: expert appeared first on The Motley Fool Australia.

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More reading

• Why is the Vulcan Energy share price lifting today?
• Why Brickworks, IDP Education, IGO, and New Hope shares are racing higher
• What’s the outlook for ASX 200 retail shares as inflation begins to bite?
• Do AFIC dividends come fully franked?
• Why has the Chalice Mining share price crashed 40% in 4 months?

Motley Fool contributor Bernd Struben 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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The Australian Foundation Investment Company Ltd (ASX: AFI), or AFIC for short, is a popular choice for many passive ASX investors. A listed investment company (LIC), AFIC invests its capital on behalf of its shareholders.

As such, it’s become a favourite over its long history for investors who just want a ‘set-and-forget’ type investment they can leave in the bottom drawer.

The popular alternative to this approach is, of course, the exchange-traded fund (ETF). ETFs have been around for far less than the 94-year-old AFIC. And yet they have exploded in popularity in recent years.

But index ETFs like the Vanguard Australian Shares Index ETF (ASX: VAS) rarely, if ever, pay fully franked dividends.

The Vanguard ETF’s dividend distributions typically come partially franked. Since not all shares in the ASX 300 Index pay fully franked dividends every year, it’s almost impossible for an index fund to give investors full franking credits. As a trust, an ETF can only pass through what it receives.

But is the same true of AFIC? Is this LIC the better choice for investors wanting to maximise the franking credits they can receive?

Do AFIC shares pay fully franked dividends?

Well, this is one area an LIC like AFIC might have an advantage. Like all LICs, AFIC is a company, not a trust. As such, it pays company tax on its profits, the process that generates franking credits in the first place.

Additionally, AFIC also holds a portfolio of blue-chip ASX shares that it manages on behalf of its investors. Some of its current top holdings are franking credit-spewing companies like Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX BHP). When AFIC receives these franking credits, it can pass them straight on to shareholders.

But let’s turn to the numbers.

So AFIC has a very long history of funding fully franked dividends. In fact, it hasn’t missed a biannual dividend payment in at least 30 years. The last time AFIC didn’t provide a fully franked dividend was way back in 1994. So, yes, we can say with relative certainty that AFIC pays fully franked dividends.

This is not guaranteed to continue into the future of course. But it would be a historically significant occasion if AFIC announced a future dividend that came with anything less than full franking.

Over the past 12 months, AFIC shares have paid out an interim dividend of 10 cents per share and a final dividend of 14 cents per share, a pattern the LIC has held to since 2020.

This gives the AFIC share price a dividend yield of 3.15% on current pricing, which grosses up to 4.5% with the value of those full franking credits.

The post Do AFIC dividends come fully franked? appeared first on The Motley Fool Australia.

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• Here’s what this top broker is saying about the BHP share price
• Here’s why I decided to buy each of the big 4 ASX 200 bank shares
• Why China’s slowdown isn’t as bad as it looks for ASX 200 mining shares
• BHP share price gains amid improved Oz Minerals takeover rumours
• Looking to buy CBA shares? Here’s how the bank’s balance sheet stacks up

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 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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The Chalice Mining Ltd (ASX: CHN) share price has tumbled in the past four months.

Since the start of May, the gold miner’s shares have crashed 40%, making it one of the worst performers across the sector.

In retrospect, Newcrest Mining Ltd (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) have declined by 35% and 20%, respectively across the same time period.

At the time of writing, Chalice Mining shares are clawing back some of its losses, up 2.41% to $4.035.

What’s happened to the Chalice Mining share price?

Downward pressure on gold prices has driven investors to flee the precious metal causing a sell-off for Chalice Mining shares.

Gold has been in the spotlight in recent times as central banks around the world lift interest rates to combat inflation.

The metal broke under the US$1,700 barrier for the first time in many months to currently trade at US$1,675 per ounce. This means gold has fallen 10% since the start of May.

On the other hand, bond yields have risen across the board, with the US two-year treasury rate at 3.94% – the highest since July 2007.

In early September, Chalice Mining released its presentation highlighting the significant exploration upside for the Julimar Ni-Cu-PGE Project in Western Australia.

Management noted that the Julimar discovery has kick-started the new West Yilgarn Ni-Cu-PGE Province, which could deliver more major discoveries.

However, investors were unfazed by the presentation, sending the Chalice Mining share price 13.04% lower to $3.75.

The S&P/ASX All Ordinaries Gold Index (ASX: XGD) retreated 1.77% on the same day (7 September).

Chalice Mining share price summary

Over the last 12 months, Chalice Mining shares have dropped 40%, with year-to-date down 60%.

The company’s share price reached a 52-week low of $3.37 in late June before moving in a sideway channel.

Chalice Mining commands a market capitalisation of roughly $1.52 billion.

The post Why has the Chalice Mining share price crashed 40% in 4 months? appeared first on The Motley Fool Australia.

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More reading

• What’s with ASX copper shares on Thursday?
• Why did the Chalice Mining share price leap 10% on Tuesday?
• Here are the top 10 ASX 200 shares today
• Chalice Mining share price lifts on positive exploration results today
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Aaron Teboneras has positions in Northern Star Resources Limited. 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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The Magellan Financial Group Ltd (ASX: MFG) share price is trading higher today amid a better day for ASX financial services shares on Tuesday.

Magellan Financial Group’s shares are up 3.73% to $12.24 a share at the time of writing, while the Magellan Global Fund (ASX: MGF) is currently trading flat.

Some of Magellan’s peers are also slightly more buoyant today. Insignia Financial Ltd (ASX: IFL) and Virgin Money UK CDI (ASX: VUK) are up 0.94% and 1.61%, respectively.

The S&P/ASX 200 Financials Index (ASX: XFJ) is also 1.2% higher at the time of writing.

Today’s rise in the Magellan share price comes amid the company’s ongoing share buyback program. In March, the fund manager announced plans to buy back 10 million fully paid ordinary shares from the market, the equivalent of 5.4% of the shares on issue.

The company has issued daily notifications that it’s been scooping up its shares ever since.

But there have been no other updates from the company recently. So why are Magellan and other ASX financial shares rising on Tuesday? Let’s investigate.

Australian and US equities rise

The bigger picture is that both Australian and US equities markets overnight are lifting. So for the Magellan share price, and that of its peers, it could be a case of a rising tide lifting all boats.

The S&P/ASX 200 Index (ASX: XJO) is 1.21% higher in Tuesday afternoon trading, gaining more than 1% in the first ten minutes of today’s session.

US equities had a bumpy ride overnight with volatility in both the S&P 500 and the NASDAQ Composite indices during trading, but both finished in the green.

The S&P 500 closed 0.69% ahead, while the NASDAQ Composite recorded a 0.76% gain.

Volatility dips before likely rate hike

Curiously, the CBOE Volatility Index dived 2.05% overnight, which suggests that the next US trading session could be a little less bumpy.

This may be the calm before the storm, however, with US interest rates expected to rise at the next United States Federal Reserve meeting later this week (early Thursday morning Australian time).

It’s speculated interest rates will increase by a hefty 75 basis points amid worse-than-expected inflation numbers posted last week.

The aftermath of the next rate hike could be a watershed moment for US equities, with some investors believing it could turn the Fed’s soft landing into a steep recession.

Thus, how the market responds to the hike may be a valuable indicator of how the rest of the economy feels.

Magellan share price snapshot

Today’s share price gain will be welcome news for Magellan shareholders. The company’s share price is down 42% year to date and 68% lower over the past 12 months.

That’s well below the ASX 200 financial index’s loss of 5.6% in 2022 so far and 6.2% in the past year.

The company’s market capitalisation is around $2.2 billion.

The post Why is the Magellan share price higher on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• 3 blue-chip ASX 200 shares touting the highest dividend yield in September
• Magellan share price drops 5% amid broader sell-off
• The Magellan share price has fallen over 10% in a month: Is it time to buy the dip?
• Steady compounders: 3 ASX 200 shares that have delivered over a decade
• Why Breville, Incitec Pivot, Magellan, and Super Retail shares are dropping

Motley Fool contributor Matthew Farley 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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