The Novonix Ltd (ASX: NVX) share price is surging ahead today.

The battery technology company’s share price is rising more than 8% to $2.63. However, in earlier trade, the company’s share price lifted 13% before pulling back. For perspective, the S&P/ASX 200 Index (ASX: XJO) is up 0.3% today.

Let’s take a look at what could be impacting Novonix.

Novonix share price rises

The Novonix share price is lifting, but it is not alone among ASX technology shares today. The S&P/ASX All Technology Index (ASX: XTX) is jumping 1.5% today. Elmo Software Ltd (ASX: ELO) shares are lifting 11%, while Block Inc (ASX: SQ2) shares are up 4%,

The technology heavy NASDAQ jumped 4.1% in the United States on Wednesday. This was the biggest daily jump since 2020, Reuters reported.

This followed Federal Reserve chairman Jerome Powell alleviating some investor concerns, despite a 75 basis points hike. Leuthold Group chief investment strategist Jim Paulsen said in comments cited by the publication:

He (Powell) did not commit to any specific rate hike in the September meeting

Novonix Limited American Depository Shares (NASDAQ: NVX) soared 11.65% in the USA on Wednesday. Novonix started trading on the NASDAQ via its American Depositary Receipts under the ticker NVX in February this year.

Novonix is working on battery technology solutions for use in electric vehicles and a clean energy future.

Federal Treasurer Jim Chalmers introduced legislation into parliament on Wednesday providing tax incentives for electric vehicles, the Canberra Times reported.

Also in the US, Bloomberg reported overnight that two US Senators have struck a deal on legislation that could extend the tax credit for electric vehicles.

Novonix released a quarterly update to the market yesterday, including cash receipts of $2.5 million and an operating cash outflow of $7.9 million.

Novonix share price snapshot

The Novonix share price has climbed 4% in the past year, but it has slumped 71% year to date.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has shed nearly 7% in a year.

Novonix has a market capitalisation of about $1.3 billion based on the current share price.

The post Why did the Novonix share price just soar 13%? appeared first on The Motley Fool Australia.

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More reading

• Why Block, Iluka, Nitro, and Novonix shares are dropping today
• Powering down: Novonix share price slumps following quarterly results
• After gaining 27% last week, the Novonix share price is struggling this week. What gives?
• Why is the Novonix share price surging 9% on Thursday?
• 3 ASX 200 tech shares having a stellar session today

Motley Fool contributor Monica O’Shea 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 Block, Inc. and Elmo Software. The Motley Fool Australia has positions in and has recommended Block, Inc. and Elmo Software. 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 Atlas Arteria Group (ASX: ALX) share price is suffering today after hopes of a takeover bid were dashed.

After weeks of back and forth negotiations, IFM Global Infrastructure Fund has backed out of acquisition discussions with the S&P/ASX 200 Index (ASX: XJO) toll road operator.

At the time of writing, the Atlas Arteria share price is $7.60, 6.7% lower than its previous close.

Let’s take a closer look at the news driving the infrastructure giant into the red.

Infrastructure fund backs out of ASX 200 takeover talks

The Atlas Arteria share price is defying the ASX 200’s gains on Thursday to plunge lower after $76 billion infrastructure fund IFM scrapped plans for a takeover bid.

The fund nabbed a 15% hold in the ASX 200 company’s shares last month.

On announcing its new major shareholder status, it revealed it was also considering posting a takeover bid for the company.

The takeover interest – and the $8.10 per share IFM paid for Atlas Arteria’s stock – took the market by storm. The Atlas Arteria share price launched 16% on the back of the news.

But any remaining excitement has been quashed today after IFM announced it’s “not presently in a position to meaningfully progress a proposal”. Though, it has left the door open for future takeover talks.

IFM Global Infrastructure Fund is run by IFM Investors, which is owned by Australian industry super funds. The fund headed the consortium that acquired Sydney Airport earlier this year.

Today’s news follows two meetings in which IFM and Atlas Arteria shared non-confidential information to help the fund progress an offer.

The Atlas Arteria share price’s Thursday tumble leaves it 10% higher than it was at the start of the year. It’s outperformed the ASX 200 by around 20% in that time.

It is also up by 24% over the past 12 months.

The post No deal: Why this $7.8b ASX 200 share is sinking 7% today appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: Rio Tinto drops, tech shares jump, Macquarie impresses
• 3 ASX 200 shares wielding a shield for returns: fundie
• 3 ASX shares for ‘predictability’ through tough times: expert
• Atlas Arteria share price lifts as revenue spikes 19%
• How to beat the market with ‘boring’ ASX shares: fundie

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 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 Fortescue Metals Group Limited (ASX: FMG) share price is on the rise today.

This comes after the company released a trading update for the fourth quarter of the 2022 financial year.

In mid-morning trade, the iron ore miner’s shares are up 1.71% to $18.49.

What did Fortescue report for Q4 FY22?

Here’s a quick summary of how the company performed for the 3 months that ended 30 June 2022.

• Record iron ore shipments of 49.5 million tonnes (mt), up 6% quarter on quarter
• Average revenue of US$108 per dry metric tonne (dmt), up 8% quarter on quarter
• C1 costs of US$17.19 per wet metric tonne (wmt), up 9% quarter on quarter
• Cash on hand of US$5.2 billion and net debt of US$0.9 billion

What happened during the quarter?

For the final quarter of 2022, Fortescue delivered a 4% year on year increase in shipments to a record 49.5mt. This means that shipments for FY22 have now reached 189mt, exceeding its top end guidance of 188mt.

In addition, the average price of iron ore came to US$107.84/dmt for the quarter. This represents revenue realisation of 78% of the average Platts 62% CFR Index, up 70% in Q3 FY22.

The C1 cost in Q4 FY22 came to US$17.19/wmt, reflecting an increase of 9% against the previous quarter. This was on the back of higher diesel costs, labour rates and other consumables.

Nonetheless, the C1 cost in FY22 stood at US$15.91/wmt which Fortescue holds the spot as the industry’s leading cost position.

Management commentary

Fortescue’s CEO, Elizabeth Gaines touched on the company’s quarterly performance. She said:

The Fortescue team has delivered excellent results for the June quarter, with record iron ore shipments of 49.5 million tonnes. This outstanding operating performance has resulted in record FY22 shipments of 189 million tonnes, exceeding the top end of guidance. This was achieved in a challenging operating environment due to the impact of COVID-19 throughout the financial year. Despite industry-wide and global headwinds, Fortescue’s unique culture and Values has delivered these exceptional results and I am immensely proud of the performance of the team.

Ms Gaines continued on to talk about the near-term future, adding:

Building on another year of record performance, our guidance for FY23 reflects our ongoing commitment to optimising returns from our integrated operations and marketing strategy, with total shipments in the range of 187 – 192 million tonnes.

We remain focused on innovation and productivity to maintain our industry leading cost position and deliver strong operational performance. Together with our focus on investing in growth through the Iron Bridge Magnetite project and Fortescue Future Industries, we are well placed to advance our transition to a global green energy and resources company and ensure our stakeholders continue to benefit from Fortescue’s success

FY23 outlook

Looking ahead, Fortescue revealed its FY23 guidance to the market. Here’s a rundown of what to expect in the new financial year.

• Iron ore shipments of 187 – 192mt, including approximately 1mt from Iron Bridge
• C1 cost for hematite of US$18.00 – US$18.75/wmt
• Capital expenditure (excluding FFI) of US$2.7 – US$3.1 billion, inclusive of sustaining and development capital, exploration and studies, decarbonisation and major projects
• FFI’s anticipated expenditure between US$600 – US$700 million, inclusive of US$100 million of capital expenditure and US$500 – US$600 million of operating expenditure

The above guidance is based on an assumed FY23 average exchange rate of AUD: USD 0.70.

Fortescue share price snapshot

Since 2022, the Fortescue share price has struggled to remain above the psychological $20 barrier consistently.

The company’s shares are down almost 5% for the period after a volatile past few months.

Based on today’s price, Fortescue presides a market capitalisation of approximately $57.58 billion.

The post Fortescue share price lifts on record iron ore exports appeared first on The Motley Fool Australia.

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More reading

• Top broker issues new warning on outlook for iron ore price
• Here’s the Fortescue dividend forecast through to 2024
• Here are the top 10 ASX 200 shares today
• Why is the Fortescue share price climbing today?
• How might China’s $6b Mineral Resources Group impact the iron ore price?

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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At lunch on Thursday, the S&P/ASX 200 Index (ASX: XJO) has faded from its intraday highs but remains on course to record a decent gain. The benchmark index is currently up 0.5% to 6,856.1 points.

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

Rio Tinto shares drop

The Rio Tinto Limited (ASX: RIO) share price is missing out of the good times today. Investors have been selling the mining giant’s shares after its half-year results fell short of estimates. Rio Tinto reported a 26% decline in underlying EBITDA to US$15,597 million and declared an interim dividend of US$2.76 per share. This compares to estimates of US$16,813 million and US$3.97 per share, respectively.

Tech shares jump

One area of the market that is booming on Thursday is the tech sector. The likes of Block Inc (ASX: SQ2), Megaport Ltd (ASX: MP1), and Zip Co Ltd (ASX: ZIP) are all recording strong gains and helping to drive the S&P ASX All Technology index 1.3% higher today. This follows a very strong night of trade on Wall Street’s NASDAQ index, which saw the tech-focused index rise a stunning 4.1%.

Macquarie Q1 update impresses

The Macquarie Group Ltd (ASX: MQG) share price is pushing higher today after investors responded positively to the investment bank’s first quarter update. Management advised that favourable trading conditions saw Macquarie’s operating groups deliver net profit contributions that were up on the first quarter of FY 2022. The highlight was its annuity-style businesses, which delivered a combined first quarter net profit contribution that was “significantly” up on the prior corresponding period.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Thursday has been the Zip share price with a 16% gain on no news. Its shares have now risen over 200% since the end of June. Going the other way, the worst performer has been the Atlas Arteria Group (ASX: ALX) share price with a 7% decline. This follows news that IFM has walked away from takeover talks.

The post ASX 200 midday update: Rio Tinto drops, tech shares jump, Macquarie impresses appeared first on The Motley Fool Australia.

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More reading

• Zip share price rockets again and is now up 225% in four weeks
• Here’s why the Block share price is charging higher today
• Sandfire share price rallies as miner beats production guidance
• Did the Rio Tinto interim dividend really just tumble 52%?
• ASX 200 shares marching higher on successive US Fed interest rate hike

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 Block, Inc., MEGAPORT FPO, and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool Australia has recommended MEGAPORT FPO and Macquarie Group 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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The Ethereum (CRYPTO: ETH) price is rocketing.

Ethereum is currently trading for US$1,613 (AU$2,303), up 12% since this time yesterday.

Over the past 24 hours, the world’s No. 2 crypto has traded as high as US$1,637 and as low as US$1,424, according to data from CoinMarketCap.

The soaring Ethereum price has lifted the altcoin’s total market valuation up to US$197 billion. Though it’s worth noting that even with the latest leg up, the price remains down 67% from the 16 November all-time highs of US$4,892.

What’s lifting the Ethereum price?

It’s not just the Ethereum price that’s off to the races today.

Of the top 100 cryptos only one – TerraClassic (CRYPTO: USD) – is in the red over the past 24 hours at the time of writing.

The broad rally follows in the footsteps of a stellar session on the tech-heavy Nasdaq Composite (NASDAQ: .IXIC) yesterday (overnight Aussie time), which closed up 4.1%.

Here in Australia, investor risk appetite also looks to have been spurred, with the S&P/ASX All Technology Index (ASX: XTX) up 1.2%, having earlier posted gains of 3.5%.

And if 2022 has demonstrated anything in the world of cryptos, it’s that they’ve been moving closely in line with other risk assets, like high-growth tech shares.

“Crypto markets are very sensitive to US markets, in particular to monetary policy decisions from the Fed to combat rising inflation,” said eToro’s market analyst and crypto expert Simon Peters.

“The raising of interest rates and rising bond yields have affected US equity valuations and, by extension, crypto markets in recent months.”

Why are risk assets rallying?

If the Ethereum price is shooting higher alongside a broader rally in risk assets, that begs the question, why are risk assets rallying?

The answer lies with the US Federal Reserve’s 0.75% interest rate hike yesterday, the second consecutive outsized rate rise.

While rate increases often depress risk assets, investor sentiment was lifted by comments from Fed chair Jerome Powell, indicating that the pace of future rate hikes from the central bank may soften.

The post The Ethereum price just shot up 12%. Here’s why appeared first on The Motley Fool Australia.

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More reading

• Bitcoin or Cardano: which crypto is most widely held among Aussies in 2022?
• Why is the Solana price sinking today?
• Why top cryptocurrencies Bitcoin, Ethereum, and Dogecoin are slumping today
• Why Bitcoin, Ethereum, and Shiba Inu are falling today
• Can Ethereum reach $10,000?

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 Ethereum. The Motley Fool Australia has positions in and has recommended 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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The Elmo Software Ltd (ASX: ELO) share price is flying today, up 17% in early trading before settling.

This follows the software‐as‐a‐service (SaaS) company releasing its preliminary unaudited results for FY22 and positive guidance for FY23.

The Elmo share price opened at $2.63 and is now $2.68, up 10.29%. In earlier trading, it reached $2.85.

Elmo share price up 17% on ‘strong’ ARR growth

The highlights are as follows:

• Revenue of $91.4 million, up 32% on the previous corresponding period (pcp)
• Annual recurring revenue (ARR) of $108.2 million, up 29% compared to 30 June 2021
• Cash receipts of $116.9 million, up 46% pcp
• Underlying EBITDA of $7.1 million, up $6.5 million pcp and above the top of the upgraded guidance range
• $47.9 million cash balance
• Total operating cash outflow of ($17.4 million), a 34% improvement pcp.

What else happened in FY22?

Elmo offers cloud‐based services to small and medium-sized businesses on an SaaS model to help them manage staff, processes, wages, and expenses.

In its statement, Elmo said the business was starting to ‘reap the benefits of scale’.

This follows many years of investment and development not only in the product but also in the team. Elmo was established in 2022.

More small and medium-sized businesses are adopting cloud‐based technology to manage themselves. Platforms like Elmo are particularly relevant in today’s age of more people working from home or on a contract basis. This is reflected in Elmo’s ARR, which went above the $100 million milestone in FY22.

What did management say?

Commenting on the results, CEO Danny Lessem said:

We are now experiencing the benefits of scale as a result of the many years of growth and investment into the product and team.

The investment phase has been materially completed and the existing cost base will be leveraged through FY23. As a result, underlying EBITDA came in at positive $7.1 million, up $6.5 million pcp.

Our strong brand in the markets we operate, our many years of investment into our product and the increased adoption of people management software, have ensured that we have strong momentum going into FY23.

Despite the broader macroeconomic environment, this momentum is supported by our sales pipeline which underpins our FY23 guidance.

What’s next?

Increased operational efficiencies mean Elmo now expects to reach operational cash flow breakeven in FY23.

Elmo’s guidance for FY23 is:

• ARR of $134 million to $140 million with organic growth of 24% to 29%
• Operating cash flow breakeven
• EBITDA of $20 million to $25 million.

Elmo also released a business update today. In it, Elmo reports a compound annual growth rate (CAGR) for its ARR of 37% since FY18.

Elmo share price snapshot

The Elmo share price has fallen by 42% in the year-to-date. It hit a 52-week low in late June.

As an ASX tech share, Elmo has been hit hard by the market sell-off in 2022.

The S&P/ASX All Technology Index (ASX: XTX) is down 29% in the year to date.

The post Elmo share price soars on 30% revenue boost and optimistic FY23 guidance appeared first on The Motley Fool Australia.

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More reading

• Zip share price rockets again and is now up 225% in four weeks
• Here’s why the Block share price is charging higher today
• Sandfire share price rallies as miner beats production guidance
• Did the Rio Tinto interim dividend really just tumble 52%?
• Charging up: Vulcan share price lifts 3% as cash balance surges

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 Elmo Software. The Motley Fool Australia has positions in and has recommended Elmo Software. 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 Zip Co Ltd (ASX: ZIP) share price has continued its incredible run and charged higher again on Thursday.

In morning trade, the buy now pay later (BNPL) provider’s shares are up a further 16% to $1.43.

This means the Zip share price has now more than tripled in value since hitting a record low of 44 cents at the end of last month.

Why is the Zip share price rocketing higher?

Investors have been buying Zip and other ASX tech shares today following an exceptionally strong night of trade on the NASDAQ index.

The tech focused index stormed 4.1% higher during overnight trade after the market responded positively to the US Federal Reserve’s hint that rate increases may soon moderate.

In addition, the Zip share price has been on fire this month after investors decided that it and its fellow BNPL shares had been oversold.

The buying was so strong for the shares of rival Sezzle Inc (ASX: SZL) that the company was dealt a speeding ticket by the ASX operator yesterday.

Sezzle explained what it thinks is happening:

The Company is not aware of any explanation for the increased securities price and volume. However, we note on the date in question that the entire sector strongly outperformed the market in terms of price and relative historical trading volume. We believe it is likely that investors led the increase in trading activity, because of the sector having been significantly down in recent weeks.

The post Zip share price rockets again and is now up 225% in four weeks appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why Alcidion, Betmakers, BrainChip, and Zip shares are racing higher
• Why are Zip shares getting the attention of investors today?
• Here are the top 10 ASX 200 shares 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 positions in and has recommended ZIPCOLTD FPO. 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 Vulcan Energy Resources Ltd (ASX: VUL) share price is in the green after the company updated the market on its performance over the June quarter.

The European-focused zero carbon lithium hopeful’s stock hit a high of $7.54 – a 5% gain – this morning. It has since slipped slightly to trade at $7.40, 3.06% higher than its previous close.

Vulcan share price gains on quarterly results

The following figures are converted from euros to Australian dollars at a rate of 1 euro to $1.46:

• Receipts from customers totalled $2.3 million last quarter
• Operating cash flow came to a $5.4 million outflow
• The company benefited $72.9 million from financing activities, mainly from Stellantis’ investment
• It ended the period with $255.9 million in cash

For comparison, Vulcan brought in 2.2 million euros (around $3.2 million at the above exchange rate) of customer receipts in the March quarter.

It ended the previous quarter with 155.6 million euros ($168.7 million) in cash.

What else happened in the June quarter?

A plethora of news wasn’t enough to save the Vulcan share price last quarter. It tumbled 47% over the three months ended 30 June.

Much of its downfall was exacerbated by a lithium sell-off in June despite news top-tier automaker Stellantis had snapped up $76 million worth of stock in the company at a 32% premium, as well as extending its offtake agreement.

On top of that, Vulcan signed a geothermal energy offtake agreement with a major German energy supplier and acquired new exploration licences, expanding its Upper Rhine Valley Brine Field licence area.

What did management say?

Managing director Dr Francis Wedin commented on the results boosting the Vulcan share price today, saying:

[Stellantis’] significant, premium investment in Vulcan and the Zero Carbon Lithium Project represents a strong statement by one of the world’s largest automakers regarding sustainable and strategic sourcing of battery materials.

The Vulcan team are working hard, focused on delivering the Zero Carbon Lithium Project at pace and scale … Our exploration and development teams continue to expand our Upper Rhine Valley Brine Field in response to customer demand.

What’s next?

Vulcan didn’t provide any new earnings guidance today. However, it did outline a number of its upcoming goals.

The company’s continuing to work towards its definitive feasibility study. It’s also aiming to increase its planned lithium production due to higher demand.

The company is also refurbishing its electric drill rigs ahead of operational readiness earlier next year and preassembly works for its sorption-demo plant are continuing.

Vulcan share price snapshot

The Vulcan share price has struggled through 2022 so far.

The stock has dumped 46% since the start of the year and 21% over the last 12 months.

In comparison, the All Ordinaries Index (ASX: XAO) has fallen 11% so far this year and 7% since this time last year.

The post Charging up: Vulcan share price lifts 3% as cash balance surges appeared first on The Motley Fool Australia.

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More reading

• Why Myer, South32, Vulcan, and Zip shares are racing higher
• Why is the Vulcan share price charging higher today?
• Why is the Vulcan Energy share price leaping 7% on Thursday?
• What’s the ahead for the Vulcan Energy share price?
• Why has the Vulcan share price lost a nasty 6% today?

Motley Fool contributor Brooke Cooper has positions in Vulcan Energy 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 Block Inc (ASX: SQ2) share price is charging higher in morning trade.

Shares in the global payment services provider closed yesterday at $99.50 and are currently trading for $103.75, up 4.3%.

So, why are ASX investors snapping up Block shares?

Why is the Block share price leaping higher today?

The BNPL company is having a good day on the ASX after a stellar day for its US listed stock yesterday (overnight Aussie time), which closed up 9.6% on the NYSE.

The run up in the Block share price was spurred by a broader rally across the tech sector, seeing the NASDAQ finish the day up 4.1%.

A similar trend is emerging here on the ASX, with the S&P/ASX All Technology Index (ASX: XTX) leading the charge today. The All Tech index is up 2.8% at the time of writing, compared to a more moderate gain of 0.8% posted by the All Ordinaries Index (ASX: XAO).

Block shares and equities more broadly are rallying following yesterday’s 0.75% interest rate hike by the US Federal Reserve. The second consecutive month of an outsized rate rise by the world’s most influential central bank.

While that may seem counterintuitive, traders took heart from some modestly dovish words by Fed chair Jerome Powell, indicating that the pace of further rate hikes may soon moderate.

How that all plays out remains to be seen.

But you won’t hear shareholders complaining about the big leg up in the Block share price today, trimming the company’s year-to-date losses to 41%.

The post Here’s why the Block share price is charging higher today appeared first on The Motley Fool Australia.

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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 Block, Inc. The Motley Fool Australia has positions in and has recommended Block, Inc. 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 Sandfire Resources Ltd (ASX: SFR) share price is rising this morning after the company bested its full-year production guidance with 4Q FY22 output rising strongly.

Shares in the copper and zinc miner are currently up 1.19% to $4.25 apiece, while the S&P/ASX 200 Index (ASX: XJO) is climbing by 0.53%.

Investors cheered Sandfire’s latest quarterly production update even though rising costs are crimping its margins.

Sandfire share price jumps on production increase

The Sandfire share price is in the green today after the company reported an increase in production of all its minerals in the June quarter of FY22.

What’s more, the miner has exceeded its full-year production guidance for copper, zinc, lead, and silver.

Sandfire produced 34,974 tonnes of copper in the last quarter of the financial year, which is 21.5% above the previous quarter.

This takes the group’s total copper output to 98,367 tonnes for FY22. This is better than the 92k to 95k tonne forecast by management.

Other minerals provide tailwind

Zinc production also increased by 42.8% in the June quarter compared to the March quarter to 22,880 tonnes. Full-year Zinc output stood at 38,907 tonnes – nearly 1,000 tonnes above Sandfire’s FY22 guidance.

The quarterly output of lead and silver came in at 2,201 tonnes and 0.8 million ounces, respectively. The full-year lead output is 4,102 tonnes and silver is 1.5 million ounces. This compares with management’s full-year guidance of 3,000 tonnes of lead and around 1.4 million ounces of silver.

MATSA lifting Sandfire’s production numbers

The growth in output is largely thanks to Sandfire’s acquisition of MATSA. And MATSA is a gift that keeps on giving as Sandfire issued a reserve upgrade for the Spanish asset at the same time as its quarterly report.

Sandfire noted that the proved ore reserve estimate increased by 41% to 26.2Mt at 1.7% copper and 2.7% zinc. Management added:

Contained ore tonnes have increased by 3% with an 8% decrease in contained copper and a 5% increase in contained zinc since the previous Ore Reserve estimate stated as at 31 July 2020. This replaces mining depletion over the intervening two years.

Rising costs casting a shadow

But it isn’t all good news for the company and potentially the Sandfire share price. Just as with other miners, rampant inflation is driving up costs for Sandfire at a time when commodity prices are coming under pressure.

The group’s C1 cash cost surged more than 34% quarter-on-quarter to US$1.57 a pound. This pushed Sandfire’s full-year C1 cost to US$1.27 a pound.

The cost pressure isn’t expected to ease either. Management believes the high cost will stick around for the rest of this financial year as it warned that FY23 C1 cost will reach US$1.57 a pound.

Sandfire FY23 production guidance

Meanwhile, detractors will also point out that Sandfire’s copper production may have already peaked. The miner issued a wide production range for FY23 of between 81k and 89k tonnes. That’s below the 98,367 tonnes it delivered in FY22.

But the takeover of MATSA will give its zinc output a big boost to 78k-83k for FY23, while lead should increase to between 6k and 10k for the year.

The post Sandfire share price rallies as miner beats production guidance appeared first on The Motley Fool Australia.

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More reading

• ASX 200 shares marching higher on successive US Fed interest rate hike
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Motley Fool contributor Brendon Lau has positions in Sandfire Resources NL. 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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