ASX mining shares are off to a flying start in 2022. That’s amid a two-year-long rally that commodities have staged up until today.

The furnace began burning hotter in January as macro-economic undertones found their way into the mainstream and took markets by force.

As such, the S&P/ASX 300 Metals & Mining Index (XMM) is outstripping other sectors of the market. The XMM has climbed more than 2% this year to date, despite a correction in early March.

These three ASX mining shares are even further ahead of the pack, cruising past their 52-week highs today. Let’s take a look.

Image Resources NL (ASX: IMA)

Shares in Image Resources have surged more than 30% in the past month. They have nudged past 52-week highs in early trading today at 30 cents apiece.

Investors are rallying behind the stock after Image Resources released a significant announcement on Monday.

First, it announced that it has executed and completed a definitive and binding agreement with Sheffield Resources Ltd (ASX: SFX) for the sale of its 100% owned McCalls Project.

Sheffield has received in full the cash consideration of $12 million for the sale of the project.

Image says the site consists of four exploration licences across two project areas. The company says it contains 5.8 billion tonnes of mineral resources at 1.4% total heavy minerals (THM) for 84 million tonnes of contained THM.

It also provides a “base for potential future multi-decade production opportunities at high economy of scale and consideration for value-add production of synthetic rutile with decades of consistent feedstock sourcing.”

In the past 12 months the Image Resources share price has shot up nearly 64%. It is up 44% this year to date after the recent surge.

Nufarm Ltd (ASX: NUF)

ASX share Nufarm shot higher in early trade to bypass their previous single-year high. The Nufarm share price peaked at $5.98 in the first hour of trade before settling back to current levels.

At the time of writing, shares in the crop protection and specialist seeds business are rangebound, fetching $5.86 apiece.

This gain is despite there being no market-sensitive information from the company since February. However, agricultural commodities are spiking hard in 2022 amid the conflict in Europe, sending supply-shock jitters around the world.

Exchange traded funds (ETFs) tracking agricultural commodities have surged this year as well. Individual baskets are also setting multi-year highs, show below.

As such, Nufarm might benefit from the surge in agricultural commodities due to its position in the adjacent markets, meaning brokers are now starting to pay attention.

More than 46% of brokers have Nufram as a buy right now according to Bloomberg Intelligence. That’s up from 38% around a year ago.

Bell Potter is bullish, valuing the Nufarm share price at $6.40 per share. Meanwhile, Macquarie rates it a buy too with a $6.29 price target, both in notes to clients during March.

5E Advanced Materials Inc (ASX: 5EA)

Shares in 5E Advanced Materials have themselves advanced to new highs today, currently trading at $3.47 apiece.

Whilst there’s been nothing price sensitive out of the company’s corner today, it did announce that its equity started trading on the NASDAQ from 15 March. It will trade under the ticker symbol FEAM.

The company’s CHESS Depositary Interests (CDIs) will continue trading on the ASX under the current ticker 5EA.

Under the NASDAQ uplisting, each 5E Advanced Materials share represents 10 CDIs, per the company.

The company says it has “begun extensive investor outreach and non-deal marketing efforts in the US with assistance from its capital markets advisor.”

Speaking on the NASDAQ listing, 5E CEO Henri Tausch was positive and said this was an important milestone in the company’s growth narrative.

“Our NASDAQ listing delivers another important milestone for the Company, and I am incredibly proud of the team who have worked diligently to deliver a successful US listing,” he said.

“We also look forward to working with US and other NASDAQ investors in our pursuit to become a vertically integrated global leader in boron advanced materials.”

Trading volume of 5EA’s shares today is at 163% of its four-week average volume, at the time of writing.

The post 3 ASX mining shares rocking 52-week highs today appeared first on The Motley Fool Australia.

More reading

• 3 ASX shares that could get a slice of a record $81bn farm output this year
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Motley Fool contributor Zach Bristow 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 Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) is on course to record a solid gain. In afternoon trade, the benchmark index is up 0.85% to 7,157.7 points.

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

Austal Limited (ASX: ASB)

The Austal share price is down 1.5% to $2.03. Today’s decline is entirely attributable to the shipbuilder’s shares trading ex-dividend this morning for its unfranked 4 cents per share interim dividend. Eligible shareholders can look forward to receiving this dividend in their bank accounts next month on 21 April.

Contact Energy Limited (ASX: CEN)

The Contact Energy share price has dropped 5.5% to $7.32. This morning the New Zealand based energy company released its operating report for the month of February. While that report revealed a decent increase in customer connections year on year, it also showed a meaningful jump in energy costs.

Nanosonics Ltd (ASX: NAN)

The Nanosonics share price is down 3.5% to $3.74. This is despite there being no news out of the infection prevention company. However, with its shares among the most shorted on the Australian share market, sentiment certainly is low right now. Short sellers have been building up positions in response to its shock sales model update in the US.

Uniti Group Ltd (ASX: UWL)

The Uniti share price is down 2% to $3.94. Investors may be taking a bit of profit off the table today following a very strong rise in the Uniti share price on Tuesday. The telco’s shares rocketed over 30% higher after confirming reports that it was in takeover talks. According to the release, Morrison & Co. has tabled a non-binding $4.50 cash per share offer to acquire the company.

The post Why Austal, Contact Energy, Nanosonics, and Uniti shares are dropping appeared first on The Motley Fool Australia.

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• ASX 200 (ASX:XJO) midday update: Uniti jumps on takeover speculation, Rio Tinto and Yancoal tumble

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. owns and has recommended Austal Limited and Nanosonics Limited. The Motley Fool Australia owns and has recommended Nanosonics Limited. The Motley Fool Australia has recommended Uniti Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Flight Centre Travel Group Ltd (ASX: FLT) share price is ascending today, currently trading up 1.6% at $19.06.

In earlier trade, Flight Centre shares surged to $19.75, up 5% on yesterday’s close. For perspective, the S&P/ASX 200 Index (ASX: XJO) is ahead 0.89% today.

So what could be impacting the Flight Centre share price today?

New Zealand reopening

The Flight Centre share price could have been buoyed by news from across the ditch.

Australian tourists will be welcome to New Zealand earlier than expected, the New Zealand Government announced today. Australians will be able to travel to New Zealand without isolating from 12 April.

New Zealand Prime Minister Jacinda Ardern said:

Reopening in time for the upcoming Australian school holidays will help spur our economic recovery in the short term and is good news for the winter ski season.

New Zealand also launched a new tourism marketing campaign in Australia ahead of the border reopening.

Flight Centre operates in 23 countries, including Australia, New Zealand, America, Europe, the United Kingdom, Canada, South Africa, the United Arab Emirates, and Asia.

Yesterday, the Federal Government revealed it will lift the ban on international cruise ships. Cruise ships will be able to arrive and depart Australian ports from 17 April. Cruise ship trips departing from Australia are among Flight Centre’s travel offerings.

On Monday, Flight Centre announced a new travel technology investment. The company has increased its interest in travel technology business TPConnects from 22.5% to 70%.

Flight Centre is not the only ASX travel share rising today. The Qantas Airways Limited (ASX: QAN) is also up 2.94%, Webjet Limited (ASX: WEB) is climbing 2.55%, while Corporate Travel Management Ltd (ASX: CTD) is surging nearly 5%.

Flight Centre share price recap

The Flight share price has ascended 8% in the year to date, but has gained just 0.47% in the past year.

In the past month, the travel company’s shares have dropped nearly 4%, while they have risen nearly 11% in a week.

Flight Centre has a market capitalisation of $3.8 billion based on the current share price.

The post Why is the Flight Centre share price lifting off today? appeared first on The Motley Fool Australia.

More reading

• Why are ASX travel shares taking off today?
• ASX 200 (ASX:XJO) midday update: Magellan jumps on buyback news, travel shares take off
• Flight Centre (ASX:FLT) share price climbs amid technology investment
• These are the 10 most shorted ASX shares
• Here’s why ASX 200 travel shares are having another stellar day

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 Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a strong gain. The benchmark index is currently up 1% to 7,164.7 points.

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

Arafura Resources Limited (ASX: ARU)

The Arafura Resources share price is up over 20% to 23.5 cents. This follows news that the rare earths developer has been awarded a $30 million grant by the government. These funds will be used to support the construction of the rare earth separation plant at its Nolans Project. The grant is part of the Federal Government’s Modern Manufacturing Initiative.

Block Inc (ASX: SQ2)

The Block share price is up over 7% to $143.52. This follows a similarly strong gain by the payments giant’s US listed shares on the NYSE last night. It isn’t just Block that is rising in the tech sector today. The S&P ASX All Technology index is up by a sizeable 2.5% at the time of writing.

Magellan Financial Group Ltd (ASX: MFG)

The Magellan share price is up 4% to $14.42. This struggling fund manager’s shares have taken off today after it announced plans to buy back up to 10 million shares on-market. This represents approximately 5.4% of its shares on issue. Management advised that the buyback is “consistent with our aim to deliver capital efficiency, solid dividends and attractive returns for shareholders with a focus on our core funds management business.”

Qantas Airways Limited (ASX: QAN)

The Qantas share price is up 3% to $5.09. Investors have been buying Qantas and other travel shares on Wednesday following another pullback in oil prices. The recent weakness in oil prices is good news for the airline operator given how much it spends on fuel. In addition, any relief this causes for petrol prices could give consumer sentiment and spending a boost.

The post Why Arafura, Block, Magellan, and Qantas shares are storming higher appeared first on The Motley Fool Australia.

More reading

• Why are ASX travel shares taking off today?
• Qantas share price lifts as CEO takes to the skies
• ASX 200 (ASX:XJO) midday update: Magellan jumps on buyback news, travel shares take off
• Cash to splash: Why the Arafura Resources (ASX:ARU) share price is leaping 23% today
• Magellan (ASX:MFG) share price on watch after announcing share buyback

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. owns and has recommended Block, Inc. The Motley Fool Australia owns and has recommended Block, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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ASX travel shares are handily outpacing the benchmark index today.

And that’s on a day that’s seen the S&P/ASX 200 Index (ASX: XJO) charge 1% higher by lunchtime.

The Qantas Airways Limited (ASX: QAN) share price, however, has gained 3 times more, currently up just over 3%.

Fellow ASX travel share Webjet Limited (ASX: WEB) is also outperforming, up 2.2%, while the Flight Centre Travel Group Ltd (ASX: FLT) share price has gained 1.3% at this same time.

Among the smaller ASX travel shares, Helloworld Travel Ltd (ASX: HLO) has gained 3.5% so far in intraday trading.

Why are ASX travel shares taking off today?

There look to be a number of factors helping buoy ASX travel shares today.

First, momentum is building across the world to remove travel restrictions put in place 2 long years ago to mitigate the impacts of COVID-19.

New Zealand, a very popular destination for Aussies (and vice versa), announced that commencing 13 April, vaccinated arrivals from Australia will be able to enter without having to isolate. New Zealand intends to open its doors to a long list of other nations in early May.

On the far side of the world, the United Kingdom – another popular 2-way travel route from down under – is also helping boost travel sentiment. The UK is set to scrap its last COVID travel restrictions this week. Arrivals will no longer need to be tested.

What’s happening down under? 

Australia is taking its own big steps in ending pandemic border restrictions, helping lift investor sentiment for ASX travel shares. Among the most recent moves, the Aussie government is ending its ban on international cruise ship arrivals as of 17 April.

Commenting on the end of the cruise ship embargo, Helloworld CEO, Andrew Burnes said:

This has been a long time coming and agents and their clients across Australia are both relieved and thrilled that this ban is finally coming to an end. The lifting of this ban will make a material difference to the sales of our agents and of Helloworld’s leisure travel divisions, both retail and wholesale.

The Federal Government has indicated the final decision on opening ports rests with each State Government and we look forward to that occurring as soon as possible.

Lower energy prices good news for ASX travel shares

Atop the lifting of COVID travel restrictions, another big factor that’s helping boost ASX travel shares is a retreat in crude oil prices.

With jet fuel counting amongst the biggest single costs for airlines, today’s US$101 per barrel Brent crude is a lot more palatable than the US$129 per barrel that Brent crude was trading for on 8 March.

The post Why are ASX travel shares taking off today? appeared first on The Motley Fool Australia.

More reading

• Why is the Flight Centre share price lifting off today?
• Why Arafura, Block, Magellan, and Qantas shares are storming higher
• Qantas share price lifts as CEO takes to the skies
• ASX 200 (ASX:XJO) midday update: Magellan jumps on buyback news, travel shares take off
• Qantas (ASX:QAN) share price lifting amid sustainable fuel deal

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Helloworld Limited. The Motley Fool Australia owns and has recommended Helloworld Limited. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

The crypto market has rallied significantly today, with positive sentiment once again delivering positive price action for various top cryptocurrencies. As of 4 p.m. ET, Ethereum (CRYPTO: ETH), Dogecoin (CRYPTO: DOGE), and THORChain (CRYPTO: RUNE) surged 4.7%, 1%, and 5.2%, respectively, over the past 24 hours. These aggregate moves essentially approximated the overall market, which was up about 2.5% over the same time period.

Ethereum, which still runs with a proof-of-work consensus mechanism, has benefited from the recent ruling from the European Union that tokens relying on proof-of-work mining would not be hindered. Previously, a proposal under the Markets in Crypto-Assets (MiCA) legislative framework had a provision that would have limited the use of proof-of-work cryptocurrencies in the region.

THORChain, a newly-listed project built on the Cosmos blockchain, continues its surge higher. This token is approaching a double-up since being listed last week, with tremendous momentum behind this new listing.

Meme token favorite Dogecoin continues to track market sentiment in the crypto world, and it has generally traded in relatively high correlation with its peers of late. Today’s move appears to be a continuation of this trend.

So what

Overall, investors across most asset classes have found a reason to be bullish today. Risk-on sentiment is pervasive, as investors appear to feel that the expected interest rate hike is already priced in. 

Of course, these token-specific catalysts have helped these top-tier tokens continue their higher-volatility moves higher. Investors appear to remain intrigued by new listings, as evidenced by THORChain’s move. Additionally, with Ethereum’s interim status as a proof-of-work token not yet hindering it, investors have a lot to feel bullish about today.

Now what

Whether today’s price action is a reprieve from a longer-term bear market that may continue in the crypto world remains to be seen. The overall crypto market has been in bear market territory for much longer than have various stock indexes, which broke into an official bear market in recent days. Accordingly, these tokens have much further to climb to get to new all-time highs, something bulls expect will be the case over the long term.

That said, anything can happen in the short term. With the crypto sector seeing continued volatility, investors in this space should prepare themselves for a rocky ride. Looking at the CBOE Volatility Index today, uncertainty is building, which is likely to be reflected in some impressive moves in the crypto sector, if this correlation holds true moving forward.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post What’s driving Ethereum, Dogecoin, and THORChain higher today? appeared first on The Motley Fool Australia.

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Chris MacDonald owns Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Ethereum. The Motley Fool Australia owns and has recommended Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The CSL Limited (ASX: CSL) share price has been somewhat of a lacklustre performer of late, especially when compared to its stellar runs of a few years ago. At the time of writing, CSL shares are going for $269.12 each, up a healthy 2.03% so far today.

However, CSL first crossed this pricing threshold back in November 2019. That means this ASX 200 healthcare giant has essentially been treading water ever since. That’s 2-and-a-half years of waiting that shareholders have had to endure, with only CSL’s sub-1% dividend yield for company.

That contrasts painfully with prior years when CSL shareholders enjoyed double-digit share price growth over 2017, 2018, and 2019.

Not that the recent share price woes are entirely CSL’s fault. It was trading at what was arguably quite a high price-to-earnings (P/E) ratio prior to the COVID-induced crash of 2020. Even today, it commands a solid P/E ratio of more than 36. And the pandemic has hit CSL hard, disrupting its plasma collection businesses around the world.

What’s notable is that CSL has been markedly higher in the past. The company hit more than $336 a share back in early 2020, its current all-time high. And the company’s present 52-week high is at $319.78.

Is 2022 the CSL share price’s $300 year?

So is 2022 the year that CSL crosses the Rubicon and heads back to a share price north of $300?

Well, one broker who thinks it might be CSL’s $300 year is Citi. As we covered yesterday, Citi has just retained its buy rating on CSL shares, replete with a 12-month share price target of $335. That would imply a potential upside of almost 25% on today’s pricing.

Citi reckons CSL’s plasma collections will come roaring back this year, exceeding pre-pandemic levels. This, the broker expects, will result in a “big boost to investor sentiment”.

No doubt shareholders who have been waiting since November 2019 for the CSL share price to keep climbing will be hoping Citi’s predictions are spot on. But we shall have to wait and see, as always.

At the current CSL share price, this ASX 200 healthcare giant has a market capitalisation of $129.6 billion, with a mostly unfranked dividend yield of 0.96%

The post Is the CSL share price heading back over $300 in 2022? appeared first on The Motley Fool Australia.

More reading

• Does the AFIC (ASX:AFI) dividend beat the ASX 200?
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• Why I closed my shares fund then launched a digital assets fund
• 5 things to watch on the ASX 200 on Wednesday
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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. owns and has recommended CSL Ltd. 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 Bruce Jackson.

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There’s no denying ASX mining shares are outstripping most other corners in this edgy market so far in 2022. Plenty of mining names are at the top of the mantlepiece, glittering in green – or gold, copper, ore – whatever they mine in the first place.

The Phosco Ltd (ASX: PHO) share price is one clear example, having surged more than 50% during this week of trading following a company announcement yesterday. Let’s take a closer look.

Why are Phosco shares charging higher?

This ASX mining share is soaring aloft the fledglings found in the rest of the market today, having announced an important update regarding its Chaketma Phosphate Project in Tunisia.

The update comes after the company restarted technical work at the site in early 2022, after maiden estimates were made back in 2012.

Phosco reported an increase in tonnage and confidence of its mineral resources estimate (MRE) at the Kef El Louz (KEL) prospect at the site.

“Independent consultancy Arethuse Geology has estimated a Measured and Indicated Mineral Resources for KEL of 55.5 million tonnes of rock at a grade of 21.2% P2O5 as per JORC (2012) guidelines, above a cut-off of 10% P2O5”, it said.

“This provides a resource base sufficient for the initial 30 years of the mining plan as proposed in the Scoping Study announced 14 August 2012”, it added.

Specifically, the new MRE signifies an increase of 50% or around 18.5 million tonnes (Mt) on the previous maiden estimate.

Investors grabbed ahold of the stock and drove it north in a vertical uptrend, right near its 52-week highs of around 1 month earlier.

Management commentary

Speaking on the announcement, Phosco’s Executive Director, Taz Aldaoud said:

We’re excited to see such a significant step-change at the KEL phosphate prospect. Not only has the size of the resource increased substantially, but equally positive is the enhancement in confidence of the resource thanks to a large conversion of tonnes into the Measured & Indicated category. There’s plenty of upside at this deposit with drilling to date covering just less than half of the surface area of known KEL mineralisation. Work is now underway to deliver an upgrade at the neighbouring GK deposit.

Phosco share price snapshot

In the last 12 months, the Phosco share price has climbed 87% and is now up more than 63% for the year to date.

During the last month, shares soared 43% and are up 74% in the last week of trading.

The post This ASX mining share has surged 50% this week. Here’s why appeared first on The Motley Fool Australia.

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• The Polynovo (ASX:PNV) share price has lost 35% this year. Is now the time to buy?
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• Qantas share price lifts as CEO takes to the skies

Motley Fool contributor Zach Bristow 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 Bruce Jackson.

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The Polynovo Ltd (ASX: PNV) share price has been on a disappointing run over the past few months. The medical device company’s shares have dropped 15% in the past month, and 35% in 2022 alone.

At the time of writing, Polynovo shares have nudged over the $1.00 mark, trading for $1.01, a gain of 0.5%.

What’s happened to Polynovo recently?

In late February, Polynovo released its interim results for FY22, highlighting mostly strong numbers across the board.

Total revenue increased by 41.9% to $18.15 million over the prior corresponding period, underpinned by growth in key markets. This included the United States, up 58% to $14.2 million in sales.

However, on the bottom line, Polynovo achieved a net loss after tax of $1.7 million when not factoring in non-cash items. This consisted of unrealised forex gain/(loss), depreciation & amortisation, and share-based payments.

The overall result fell short of market expectations, leading the company’s shares to fall 3.32% on the day. At the end of that week, its shares had sunk around 14%.

What do the brokers think?

A number of brokers weighed in on the Polynovo share price following the company’s H1 FY22 financial scorecard.

The team at Macquarie cut its 12-month price target for Polynovo shares by 44% to $1.60.

It appears the broker is acknowledging Polynovo is underperforming its expectations for FY22 but predicts the business will make a turnaround. This is in particular for its NovoSorb product which is poised for growth in the medium to long term.

In addition, Wilsons put out a more bearish tone, slashing its outlook by 22% to $1.11. Its analysts believe that the medical company’s shares are overvalued.

Based on the current Polynovo share price, this implies an upside of almost 12%.

Polynovo share price summary

Over the last 12 months, Polynovo shares have continued to decline with a loss of more than 63% in value.

This is a sharp contrast from when its shares hit an all-time high of $3.19 in April 2021 amid positive investor sentiment.

Today, Polynovo shares trade around the $1.00 mark.

The company presides a market capitalisation of roughly $664 million and has approximately 662 million shares on its books.

The post The Polynovo (ASX:PNV) share price has lost 35% this year. Is now the time to buy? appeared first on The Motley Fool Australia.

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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. owns and has recommended POLYNOVO 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 Bruce Jackson.

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Shares in Westpac Banking Corp (ASX: WBC) are edging forwards today and now trade 0.43% in the green at $23.59.

Westpac shares have staged a remarkable recovery in the past week having bounced off an 8 March low of $21.67. Even better, they have bounced off a low of $20.30 on 31 January.

In fact, Westpac is now leading the other banking majors in 2022 and has a consensus analyst price target of $26.96, according to Bloomberg Intelligence.

What tailwinds are behind Westpac shares?

Looking at the wider sector, ASX financials have clawed back gains in 2022 after whipsawing in gut-wrenching volatility over the past two to three months.

In that time the S&P/ASX 200 Financials Index (ASX: XFJ) has traded as high as 9% and as low as 8% before regaining strength once more.

The trend has looked similar to Australian large caps in the benchmark S&P/ASX 200 Index (ASX: XJO). However, as we’ve entered March, the sector has broken away from the large end of the market.

Westpac itself is now up more than 10% this year to date, and investors continue rallying the Westpac share price ahead of other banking majors at the time of writing.

What the analysts are saying

Much of the sector-specific tailwinds are centred around the debate of inflation and interest rates, according to Bloomberg economist James McIntyre.

Higher inflation is sure to impact household budgets, the economist says, meaning the Reserve Bank of Australia (RBA) will have to tighten its policy “a lot sooner to contain these pressures,” by raising base rates.

Doing so would involve a pull-through into the mortgage and credit markets, McIntyre notes, meaning Aussie banks will see more income fed down into their bottom line as profit and free cash flow.

Fellow economist Leith van Onselen at MB Super suggests that if the discount variable mortgage rate were to rise by 215 basis points, this would translate to an increase in average monthly mortgage payments of 29% from February 2022 levels.

The impact would be felt even more by fixed-rate mortgage holders due for expiry over the next two years, most of whom were underwritten at rates of less than 2.5%, he says.

Analysts at Morgans recently noted that Westpac’s share price looks cheap from what’s on offer, valuing the bank at $29.50.

It also bakes in a nice dividend growth projection of $1.19 per share in FY22 moving up to $1.60 in FY23, a jump of 34% year on year if it comes true.

As such, the macro-level tailwinds that are benefitting the sector appear to be transposing to Westpac’s share price as well, sending it further north.

Westpac is now leading each of the other banking majors in the big four, and is beating two banking/financials-specific ETFs listed on the ASX.

In the last 12 months the Westpac share price has fallen around 5% into the red. But it is up more than 10% this year to date.

The post Why has the Westpac share price rallied 8% in a week? appeared first on The Motley Fool Australia.

More reading

• Own Westpac shares? Here’s why change is afoot
• 2 ASX dividend shares analysts say are buys now
• Why ASX 200 bank shares are storming higher today
• Is the NAB (ASX:NAB) share price a buy? Top broker expects sector-leading earnings growth
• Why this broker has big doubts over Westpac’s (ASX:WBC) cost cutting plans

Motley Fool contributor Zach Bristow 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 Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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