Commonwealth Bank of Australia (ASX: CBA), Australia’s biggest bank, recently announced a huge share buy-back.

The big four ASX bank is going to conduct an off-market buy-back of up to $6 billion of CBA shares.

Is this decision a sign that the bank doesn’t have much growth potential right now?

What was the justification for the buy-back?

CBA Chair Catherine Livingstone said:

CBA’s strong capital position and our progress on executing our strategy mean that we are well placed to continue to support our customers and manage ongoing uncertainties, while also returning a portion of surplus capital to shareholders. After careful consideration, your board has determined that the buy-back is the most efficient and value-enhancing strategy to distribute CBA’s surplus capital and franking credits.

The CBA CEO Matt Comyn said:

The buy-back follows CBA’s continued strong operating performance and the completion of various divestments. After the buy-back, CBA will continue to have a strong surplus capital position to support our customers.

In terms of the CBA share price for the buy-back, there will be a tender process

The bank also noted the resilience of the domestic economy, its capacity to absorb potential stress events after completing the buy-back and the capital generated from strategic divestment as reasons for the buy-back.

Since the first half of FY19, CBA has generated $6.2 billion of excess capital from divestments.

This came after the bank generated $8.65 billion of cash net profit after tax (NPAT) – up 19.8% in FY21. It finished FY21 with a CET1 capital ratio of 13.1% (an increase of 150 basis points). The board grew its dividend by 52 cents to $3.50 per share.

Limited growth options for CBA?

Businesses have three main options when it comes to capital. They can use it to re-invest for growth (organic or acquisitions), improve the strength of the balance sheet (such as paying off debt) or pay shareholder returns (dividends and buybacks).

Boards need to assess what the best option to do is on behalf of shareholders.

CBA is already so large that there isn’t much that can significantly move the dial. It is already the biggest bank in Australia. In FY21 its operating income was $24.16 billion, an increase of just 1.7% on FY20. That was despite “strong” volume growth – both its home lending and household deposits increased by $31 billion, which were both 1.2x the system. Business lending growth was $11 billion, more than 3x the system.

CBA said it will continue to invest in its business to reinforce its product offering to retail and business customers, and extend its digital leadership.

The bank will continue to target a full year dividend payout ratio of 70% to 80% of cash net profit.

The Age reported that Omkar Joshi, a portfolio manager from Opal Capital Management, said the round of buy-backs from banks reflects a lack of compelling growth opportunities. He said:

It’s very much a reflection of the fact there is not much growth outside of mortgages.

But Mr Joshi went on to say that it wasn’t really a problem because institutional investors don’t expect large growth plans from the big four banks. It would be better for banks to focus on their core strengths in mortgages and business banking rather than try to pursue something like offshore banking.

The post Is the CBA (ASX:CBA) share buyback a sign of limited growth potential? appeared first on The Motley Fool Australia.

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• How has the Westpac (ASX:WBC) share price performed against the banking sector in August?
• Commonwealth (ASX:CBA) share price lifts despite Apple crying foul
• What’s moving the CBA (ASX:CBA) share price this week?

Motley Fool contributor Tristan Harrison 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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ASX lithium shares are surging across the board on Monday following a sharp drawdown in recent weeks.

ASX 200 lithium heavyweights Orocobre Limited (ASX: ORE), Pilbara Minerals Ltd (ASX: PLS) and Mineral Resources Ltd (ASX: MIN) are up 4.45%, 6.28% and 3.28% respectively.

Emerging players such as Piedmont Lithium Inc (ASX: PLL) and Core Lithium Ltd (ASX: CXO) are trading a respective 7.76% and 1.56% higher.

Explorers such as Liontown Resources Ltd (ASX: LTR), Lake Resources NL (ASX: LKE) and Charger Metals NL (ASX: CHR) are also catching bids, up 4.71%, 7.27% and 5.35% respectively.

What’s driving ASX lithium shares higher?

Elevated lithium demand and spot prices

Higher lithium prices continue to support the bullish performance of ASX lithium shares.

In Orocobre’s FY21 full-year results, the company highlighted an average realised price of US$8,476/tonne for its lithium carbonate, up 45% quarter-on-quarter and 117% on the prior corresponding period (pcp).

Within the results’ presentation, Orocobre pointed to growth drivers such as the electric vehicle industry which is forecast to have a compound annual growth rate (CAGR) of 20-30% for the next decade.

Orocobre reported global electric vehicle sales of 2.65 million units in June year-to-date, up 168% on the pcp, with Europe and China leading the growth.

The company also pointed at broader themes at play such as global carbon emission targets and penalties, accommodative government regulations and subsidies, and increasing electric vehicle models by vehicle manufacturers.

A return to profitability

Higher lithium prices are helping large established producers return to profitability, with China’s Tianqi Lithium Corp, one of the world’s largest lithium producers, posting its first net profit in two years.

The lithium giant reported net income of 85.8 million yuan (~A$18.2 million) for the first half of 2021 compared to a loss of 696.6 million yuan (~A$147 million) a year earlier.

The post Why ASX lithium shares are having a bumper start to the week appeared first on The Motley Fool Australia.

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• When was the best ever day on the Pilbara Minerals (ASX:PLS) share price chart?
• These 3 ASX 200 shares were flying around the share market this Friday

Motley Fool contributor Kerry Sun 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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One of the ancillary trends we have seen on global share markets over 2021 so far has been a surprising exodus from China shares. China was once touted as a high growth market. A market diversified away from both ASX and US shares no less. But recent developments have not done investors any favours.

China’s all-powerful Communist Party government has spent 2021 cracking down on several industries that it feels threaten the long-term welfare of the country. Just last month, we saw billions wiped from the valuations of several Chinese companies operating in the education space.

As we reported at the time, this was due to regulatory changes that are forcing these companies to reorganise as not-for-profit entities.

China shares face government crackdowns

We also saw a recent crackdown on the Chinese ride-sharing company DiDi Global Inc (NYSE: DIDI). This may have been the primary catalyst behind the company losing around 42% of its value since its June IPO.

This follows the clamps being put on one of China’s largest companies – Alibaba Group Holding Ltd (NYSE: BABA) – last year. Alibaba was planning on spinning off its Ant Financial division at the time. But it was forced to pull the plug at the last minute after intervention from Chinese authorities.

All of these heavy-handed moves by the Chinese Communist Party have seen a plethora of investors lose faith in China shares. Not just the ones directly affected by the actions of the Chinese government either.

The BetaShares Asian Technology Tigers ETF (ASX: ASIA) is an exchange-traded fund (ETF) that holds a basket of mostly Chinese tech shares. These not only include Alibaba and DiDi. It also includes other famous China shares like Tencent Holdings Ltd (HKG: 0700), Baidu Inc (NASDAQ: BIDU) and JD.com Inc (NASDAQ: JD).

The ASIA ETF was one of the best performing ASX ETFs of 2020. But, in 2021 so far, it’s down a nasty 12.8%. It’s also down close to 30% from its February all-time high.

Future Fund pulls the plug on China

Well, now we have some confirmation that it’s not just retail investors with paper hands. According to a report in the Australian Financial Review (AFR) last week, a larger investor has taken note.

That investor is none other than Australia’s sovereign wealth fund – the Future Fund. The result? The Future Fund is bailing out of China shares.

Future Fund chair Peter Costello told the AFR that the Future Fund needs to be careful with “sovereign money” in light of “recent circumstances” with China. Here’s some of what the former Treasurer said:

China is a big part of the emerging world and ordinarily we would be taking a big position in relation to that… But given the difficulty in the relationship between Australia and China we have pulled back on allocation in China… We think it’s wise to be cautious as Australia’s sovereign [fund], when we’re making the allocations in this difficult political climate.

The AFR reports that the Future Fund had China shares Alibaba and Tencent as its sixth and seventh largest positions as of 30 June. Both positions were reportedly worth more than $1 billion together. But in light of Mr Costello’s comments, we can probably assume these positions have been at least pruned.

Mr Costello’s comments seem to put the blame for this shift in preference for China shares to the recent well-publicised diplomatic spats between Australia and China. Even so, it’s possible that the recent tectonic shifts in China’s regulatory environment may have helped to grease the wheels.

Whatever the reason, Australia’s sovereign wealth fund is a lot less invested in China shares than it was just a few months ago. Food for thought!

The post Why is the Future Fund bailing out of China shares? appeared first on The Motley Fool Australia.

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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 shares of and has recommended Alibaba Group Holding Ltd., Baidu, and JD.com. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia has recommended JD.com. 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 Electro Optic Systems Holdings Ltd (ASX: EOS) share price is falling lower on Monday despite the Aussie technology company reporting a jump in half-year revenue.

Electro Optic Systems share price falls despite revenue growth

Shares in the space and defence group are falling after the group released its half-year results this morning. Some of the key takeaways include:

• Revenue up 30% on the prior corresponding period (pcp) to $97.8 million
• Underlying earnings before interest and tax (EBIT) before SpaceLink Costs and foreign exchange moves up 85% to -$2.1 million
• Statutory EBIT up 58% on pcp to -$7.6 million
• Statutory diluted earnings per share up 31% on pcp to -8.5 cents
• Operating cash flow of $4.6 million, compared to -$62.6 million outflow in 1H 2020

The EOS share price has slumped lower following this morning’s update. That’s despite the company noting COVID-19 disruptions weighing on earnings.

What did the 1H 2021 look like for EOS?

The Aussie tech group reported defence segment revenue growth of 25% during the period to $83.2 million. A major overseas contract and Commonwealth of Australia deals continue to underpin group earnings.

Electro Optic Systems’ communications (ex. SpaceLink) revenue jumped 60% to $13 million, while space segment revenue surged 126% to $1.6 million.

The defence and space technology company focused on research and development investment during the period but said monetisation and commercialisation are still a “work in progress”.

The Electro Optic Systems share price fell 18.5% from 4 January to 30 June. COVID-19 restrictions slowed customer decision making during the year, with the company in “advanced negotiations” with existing customers for more than $1 billion worth of new contracts to be awarded in the next 6 months.

What’s next for Electro Optic Systems and its share price?

Electro Optic Systems reported a $2.6 billion risk-weighted sales pipeline for its EOS Defence Systems. The order book sits at $375 million, with 30% domestic and 70% offshore. EOS expects to recognise 30% of the order book as revenue in the current period, with half in 2022 and the remainder in 2023.

The group cited increasing geopolitical tensions and a manufacturing-heavy COVID-19 recovery plan as key positives looking ahead to FY22.

The Electro Optic Systems share price is falling lower on Monday, and is now down more than 32% year to date.

The post Electro Optic Systems (ASX:EOS) share price falls despite revenue growth appeared first on The Motley Fool Australia.

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• These are the 10 most shorted ASX shares

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Electro Optic Systems Holdings Limited. The Motley Fool Australia owns shares of and has recommended Electro Optic Systems Holdings 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 BWX Ltd (ASX: BWX) share price is backtracking after coming out of a trading halt today.

The personal care products company provided an update to investors in regards to its capital raising efforts early this morning.

When the market opened, BWX shares rose to an intraday high of $5.56, however, those gains were quickly erased. At the time of writing, the company’s share price has rebounded to $5.12, down 3.48% on the previous close.

What did BWX announce?

A possible catalyst for investors dragging down BWX shares is an impending share dilution by the company.

In a statement to the ASX, BWX revealed it has successfully completed an $85 million (before costs) institutional placement.

This will see approximately 17.5 million new ordinary shares issued at a price of $4.85 to each participating investor. The offer represents an 8.7% discount to the last closing price of BWX’s shares on 26 August 2021.

The placement received strong interest from the company’s existing institutional shareholders, as well as other institutional investors. Demand significantly exceeded expectations of what BWX was seeking to raise under the placement.

Proceeds raised will be allocated primarily towards funding BWX’s acquisition of a 50.1% controlling interest in Go-To-Skincare. The purchase price to own a majority stake in the company is worth around $89 million.

BWX group CEO and managing director Dave Fenlon commented:

We are incredibly excited to partner with Go-To Skincare, BWX’s entry into the masstige market and the growth opportunities ahead. We are pleased with the strong institutional demand and thank investors for their support.

The new shares are expected to settle on Wednesday and be available to commence trading the following day.

About the BWX share price

Since this time last year, BWX shares are flat. However, year-to-date, they have generated returns of above 20%. The company’s share price is sitting in the upper-mid of its 52-week range of $3.60 to $5.63.

On valuation grounds, BWX presides a market capitalisation of around $699.4 million, with 141 million shares on issue.

The post BWX (ASX:BWX) share price slips 6% on placement update appeared first on The Motley Fool Australia.

More reading

• BWX (ASX:BWX) share price halted following FY21 results and Go-To acquisition

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 owns shares of and has recommended BWX 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 HUB24 Ltd (ASX: HUB) share price has been among the worst performers on the ASX 200 on Monday.

At one stage today, the investment platform provider’s shares were down as much as 8% to $29.16.

The HUB24 share price has recovered a touch this afternoon but remains down 6% to $29.69 at the time of writing.

Why is the HUB24 share price under pressure today?

The decline in the HUB24 share price on Monday appears to be a combination of profit taking after some strong recent gains and news that an insider has been selling shares.

In respect to the latter, a change of director’s interest notice reveals that its Chairman, Bruce Higgins, has offloaded a large number of shares on-market since the release of its full year results.

The notice, that was released after the market close on Friday, explains that Mr Higgins sold a total of 269,700 shares on 25 August.

This comprises 49,700 indirectly owned shares that were sold at an average of $30.47 per share and 220,000 directly owned shares sold for $30.00 per share. Combined, this equates to a total consideration of just over $8.1 million.

In addition to this, the company’s Managing Director and CEO, Andrew Alcock, sold shares on-market late last week.

However, while Mr Alcock sold 175,000 shares at an average of $30.00 per share, he also exercised some options. The CEO picked up 106,464 shares at a bargain price of $4.46 per share and 78,077 shares at an almost as attractive discount of $7.09 per share. This compares to the current HUB24 share price of $29.69.

He advised that the proceeds of the sale were “to be used to exercise options, fund taxation liabilities and personal liquidity.”

Is this a buying opportunity?

One broker that might see the weakness in HUB24 share price as a buying opportunity is Morgans. Last week it upgraded the company’s shares to an add rating with an improved price target of $31.65.

Based on the current HUB24 share price, this implies potential upside of 6.5% over the next 12 months.

The post HUB24 (ASX:HUB) share price falls 8% after $8.1m share sale by chairman appeared first on The Motley Fool Australia.

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• Why HUB24, MNF, Nanosonics, & Uniti shares are surging higher

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 shares of and has recommended Hub24 Ltd. The Motley Fool Australia has recommended Hub24 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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The Sezzle Inc (ASX: SZL) share price is flat despite the company reporting its losses increased over the first half of 2021.

Right now, the Sezzle share price is $6.42, the same as it was at Friday’s close.

Sezzle share price up despite $30 million loss

 Here’s how the buy now, pay later provider performed over the 6 months ended 30 June 2021:

• After-tax loss of US$30.4 million, compared to a US$8.2 million loss for the prior comparative period
• US$53,876,000 total income, up 159%
• Total income for the half year came to US$53.8 million, an increase of 159%
• Underlying merchant sales of US$786.2 million, a 156% increase

The company reported it received US$46.4 million of Sezzle income in the first half. Of that, US$44.4 million, or 95.8%, came from merchant fees.

It also recognised it received a total of US$7.5 million from account reactivation fees.

The company’s transaction expenses were US$18.5 million and its payment processing costs were US$13.5 million.

Those figures represent a 102% increase in costs for the six months ended June 30, 2021, mostly due to an increase in volume of orders transacted by consumers.

Sezzle incurred merchant affiliate program and partnership fees when consumers make purchases with merchants who were referred by another merchant or are associated with a partner platform. These fees equalled a total cost of US$3.2 million.

Total provision for uncollectible accounts was US$22.4 million for the first half of 2021. As a percentage of Sezzle income, the provision for uncollectible accounts was 48.3%.

What happened in the first half for Sezzle?

It’s been a busy half year for Sezzle and its share price.

The company entered a proof on concept with the USA’s Target, sending its share price a massive 22% higher.

Additionally, it partnered with Ally Bank to offer longer term loans on bigger ticket items than its original platform did.

It also entered an agreement with payment provider Discover. Discover and Sezzle teamed up to allow some of Discover’s merchants to offer BNPL services through Sezzle.

Sezzle also saw its number of active merchants increase by 150% compared to the amount it had signed up in the first half of 2020. As of 30 June 2021, Sezzle has 40,274 active merchants. Sezzle states it doesn’t depend on any one merchant for more the 7% of its merchant-related fees.

It also saw a 96% increase in its number of active customers. At the end of the half, it had 2,883,825 active users.

Additionally, Sezzle’s repeat usage reached 91.6% in the first half of 2021.

Sezzle share price snapshot

The Sezzle share price gained 40.5% over the six months ended 30 June 2021.

It has since fallen 26.9%. Right now, the company’s share price has gained 2.7% year to date and has fallen 37.2% since this time last year.

The post Sezzle (ASX:SZL) share price flat despite $30 million loss appeared first on The Motley Fool Australia.

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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 Bruce Jackson.

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The S&P/ASX 300 Index (ASX: XKO) is pushing higher on Monday, regaining lost ground from last week’s consecutive negative run.

During mid-afternoon trade, the ASX 300 is up 0.19% to 7,502 points. It’s worth noting that the index is around 1.6% from its record high of 7,625 points.

Let’s take a look at which ASX companies are the strong performers today.

Novonix Ltd (ASX: NVX)

The Novonix share price is rocketing 13.87% to $4.68, despite no market sensitive news out of the company today.

The lithium company released its full-year results to the market last Thursday, highlighting revenue growth of $5.2 million, up 22.9%.

It seems investors are buoyant on Novonix, after its shares have risen almost 30% in the past week. In August alone, the company’s share price is more than 80% higher.

Temple & Webster Group Ltd (ASX: TPW)

Another strong mover for the start of the week is the Temple & Webster share price, up 11.33% to $14.44.

The online furniture and homewares retailer provided its full year results for the 2021 financial year.

A robust performance led the company to achieving record revenue of $326.3 million, up 85% year-on-year. Net profit after tax more than doubled to $14 million, another record for Temple & Webster.

Management noted that the strong tailwinds have continued into FY22, with revenue up 49% for the first two months.

InvoCare Limited (ASX: IVC)

The InvoCare share price is storming high with an 8.59% gain to $12.14.

The funeral company posted a solid first-half result, highlighting growth across key metrics.

InvoCare turned around its fortunes to a reported profit after tax of $44 million. This is in comparison to a loss of $18 million in the H1 FY20 period.

The board declared an interim fully-franked dividend of 9.5 cents per share.

And which ASX 300 companies are heading the other way?

Dicker Data Ltd (ASX: DDR)

Deep in negative territory is the Dicker Data share price, down 12.53% to $12.85. With no news also out of the IT distributor today, the steep decline follows last Friday’s announcement.

The company reported its chair and CEO, David Dicker offloaded 1.6% of his holdings on an on-market trade. It appears the selling has pressed investors to take profit off the table. Dicker Data shares reached a record high of $16.60 on Thursday after reporting its FY21 interim results.

Altium Limited (ASX: ALU)

Also being weighed down by investors today is the Altium share price, down 10.31% to $31.22. The electronic design software company released its full-year results for FY21 with a mixed performance.

Nonetheless, the Altium board decided to lift its dividend to 40 cents for the full year, up 3% on FY20. The final dividend payment of 21 cents is scheduled for 28 September 2021.

The post Which ASX companies are starting off the week as the top movers in the ASX 300 today? appeared first on The Motley Fool Australia.

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• Temple and Webster (ASX:TPW) share price jumps 13% as revenue soars
• InvoCare (ASX:IVC) share price jumps 9% after reporting strong first half growth

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 shares of and has recommended Altium, Dicker Data Limited, and Temple & Webster Group Ltd. The Motley Fool Australia owns shares of and has recommended Altium and Dicker Data Limited. The Motley Fool Australia has recommended InvoCare Limited and Temple & Webster Group 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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At the start of each week I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Webjet Limited (ASX: WEB) remains the most shorted ASX share despite its short interest falling to 10.9%. Concerns that the Delta strain of COVID-19 could delay the travel market recovery have been weighing on sentiment.
• Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest fall to 10.8%. Short sellers may be regretting this one. Last week the travel agent’s shares rocketed higher after management revealed that it hopes to reach profitability again during FY 2022.
• Zip Co Ltd (ASX: Z1P) has seen its short interest rise slightly week on week to 9.4%. Concerns over rising costs and increasing competition appear to be behind this high level of short interest.
• Kogan.com Ltd (ASX: KGN) has short interest of 9%, which is up week on week. Short sellers will have been pleased to see this ecommerce company’s shares tumble last week after the release of a disappointing full year result.
• Electro Optic Systems Hldg Ltd (ASX: EOS) has 8.8% of its shares held short, which is up week on week. This morning Electro Optic Systems released its half year results and revealed a 30% increase in revenue but a loss after tax of $11.7 million. Its cash balance has also fallen from $128.1 million 12 months ago to $51.1 million today.
• Piedmont Lithium Inc (ASX: PLL) is a new entry in the top ten with short interest of 8.3%. Valuation and permit concerns may be weighing on the lithium miner’s shares.
• Inghams Group Ltd (ASX: ING) has 7.7% of its shares held short, which is down week on week. Short sellers may be closing positions after a strong full year result last week. The poultry company also announced an agreement to extend its key supply contract with Woolworths Group Ltd (ASX: WOW).
• Tassal Group Limited (ASX: TGR) has short interest of 7.3%, which is flat week on week. Weak seafood prices have been weighing on sentiment.
• Redbubble Ltd (ASX: RBL) is back in the top ten with short interest of 6.9%. This is despite this ecommerce company recently releasing a strong full year result. Short sellers may not believe its strong form will continue in FY 2022.
• Resolute Mining Limited (ASX: RSG) has short interest of 6.8%, which is up week on week. Last week the gold miner released its half year results and revealed a disappointing US$220 million loss.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

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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 shares of and has recommended Electro Optic Systems Holdings Limited, Kogan.com ltd, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Electro Optic Systems Holdings Limited, Kogan.com ltd, and Webjet Ltd. 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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The S&P/ASX 200 Index (ASX: XJO) is having a rather tepid start to the trading week this Monday. At the time of writing, the ASX 200 is up an incremental 0.14% to 7,498.9 points after spiking as high as 7,528.3 points earlier this morning.

Looking at how the top ASX 200 shares are faring today, and one trend becomes obvious. The ASX 200 wouldn’t be in the green at all today if it wasn’t for the performance of one sector in particular: ASX materials shares. Sometimes referred to as ‘ASX resources’, ASX materials shares basically encompass any ASX company that mines or drills for resources/commodities.

And with other ASX blue chip shares like Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC) and CSL Limited (ASX: CSL) retreating today, ASX materials shares are certainly in the spotlight. Let’s go through some of the major players today.

ASX materials shares like BHP turbocharge ASX 200

So first up is the ASX 200’s largest miner, BHP Group Ltd (ASX: BHP). BHP shares are currently up a healthy 3% to $46.04. This follows a month which investors would probably rather forget. Even after this rise, BHP is still down a nasty 14% over the past month or so. This is probably the result of the iron ore price falling steeply over the same period.

Iron ore has shown signs of stabilising this week, so this is probably why we are seeing iron miners like BHP rally today. It’s not just BHP either though.

This Monday sees BHP’s fellow iron giant Rio Tinto Limited (ASX: RIO) up 2.98% as well to $112.97 a share at the time of writing. Fortescue Metals Group Limited (ASX: FMG) is doing even better. It’s up 6.55% so far today to $21.31 after reporting its FY21 earnings this morning.

It’s not just the iron miners though which are fuelling the ASX materials sector today. We have also been big moves from ASX gold miners. Newcrest Mining Ltd (ASX: NCM) is up a healthy 1.75% today to $24.96 a share. Northern Star Resources Ltd (ASX: NST) is doing even better, up 3.2% to $9.64.

The lithium and rare earths spaces are also on fire this Monday. ASX 200 lithium company Pilbara Minerals Ltd (ASX: PLS) is soaring today, currently up a robust 6.3% to $2.20. Lynas Rare Earths Ltd (ASX: LYC) is also up big, gaining 3.43% so far today to $6.64 a share.

Long story short, ASX 200 investors can largely thank the materials sector for the gains the ASX 200 is enjoying today. What an interesting start to the week’s trading!

The post The materials sector is leading ASX 200 shares today appeared first on The Motley Fool Australia.

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• Fortescue (ASX:FMG) share price jumps 6% on surging revenue
• ASX 200 midday update: Fortescue result and dividend impress, Altium sinks
• The Fortescue (ASX:FMG) dividend has doubled to record levels

Motley Fool contributor Sebastian Bowen owns shares of Newcrest Mining Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of 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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