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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week with a small gain. At the time of writing, the benchmark index is up 0.2% to 6,585.2 points.

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

Austal Ltd (ASX: ASB)

The Austal share price is up 22% to $2.20. This follows the announcement of a major contract win in the United States. According to the release, the shipbuilder has been awarded a contract with a potential value of US$3.3 billion (A$4.35 billion) for the detail design and construction of up to 11 Offshore Patrol Cutters for the United States Coast Guard.

Mesoblast limited (ASX: MSB)

The Mesoblast share price is up 17% to 71.5 cents. This is despite there being no news out of the biotechnology company on Friday. However, it is worth noting that the company’s shares sank to a decade low on Thursday. Some investors may believe that they have now bottomed. Mesoblast’s shares are still down ~50% in 2022.

Regis Resources Limited (ASX: RRL)

The Regis Resources share price is up 9% to $1.42. This follows news that Andrew ‘Twiggy’ Forrest attempted to acquire a 15% stake in the gold miner. The iron ore billionaire was hoping to snap up the stake for $1.48 per share, which represents a 13.8% premium to its last close price. However, Forrest’s kill or fill order fell short of target at 12% filled and was cancelled.

Zip Co Ltd (ASX: ZIP)

The Zip share price is up 9.5% to 48.2 cents. This is despite there being no news out of the buy now pay later provider. Though, with its shares down 50% last month, some investors may believe they were oversold. Not even a bearish note out of Jefferies has held Zip’s shares back today. The broker retained its underperform rating and cut its price target to a lowly 38 cents.

The post Why Austal, Mesoblast, Regis Resources, and Zip shares are charging higher appeared first on The Motley Fool Australia.

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More reading

• Why is the Zip share price jumping 11% today?
• Why is the Mesoblast share price leaping 19% today?
• ASX 200 midday update: Regis Resources jumps, BHP and Rio Tinto drop
• Why is the Austal share price sailing 28% higher today?
• Regis Resources share price jumps 11% amid Twiggy Forrest raid

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 Austal Limited and 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 Kogan.com Ltd (ASX: KGN) share price was out of form again in June.

During the month, the struggling ecommerce company’s shares dropped 22% and hit a multi-year low.

This stretched the year to date decline for the Kogan share price to a disappointing 68%.

Why did the Kogan share price sinking in June?

There were a few catalysts for the weakness in the Kogan share price in June.

The first was the broad market selloff caused by recession fears, surging inflation, and rising interest rates.

The selling was particularly hard in the tech sector and particularly among ecommerce companies.

This saw fellow ecommerce shares Cettire Ltd (ASX: CTT) and Temple & Webster Group Ltd (ASX: TPW) record equally painful declines during the month.

What else?

Also putting pressure on the Kogan share price were a couple of bearish broker notes.

Hot on the heels of a downgrade to underperform from Credit Suisse in May, UBS downgraded Kogan’s shares to a sell rating and slashed its price target by 33% to $2.90.

The broker has concerns over supply chain challenges, consumer spending, and margin pressures from elevated inventory levels.

In addition, the team at Jarden retained its underweight rating and cut its price target on the company’s shares by 45% to $3.52.

Jarden highlights the same headwinds as UBS and suspects they could lead to Kogan falling well short of consensus expectations. So much so, it is expecting the company to record a loss after tax in FY 2022.

Investors may not have long to find out if this is the case. The company traditionally releases a business update in the middle of July.

The post Why did the Kogan share price sink 22% in June? appeared first on The Motley Fool Australia.

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More reading

• Best ASX shares to buy in July 2022
• Kogan shares slide 7% nearing a 52-week low
• Why is the Kogan share price jumping 12%?
• Why is the Kogan share price soaring 6% on Monday?
• These are the 10 most shorted ASX shares

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 Cettire Limited, Kogan.com ltd, and Temple & Webster Group Ltd. The Motley Fool Australia has positions in and has recommended Kogan.com ltd. The Motley Fool Australia has recommended Cettire 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 Scott Phillips.

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

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

Prior to the pandemic, Moderna (NASDAQ: MRNA) was like many other small biotechs. It had a promising technology that had yet to be proven, and no products available commercially. In fact, for the full year of 2019, Moderna had only $60 million in revenue, entirely from collaborations and grants, and it posted a net loss of $514 million. While this is not uncommon for biotechs, it’s a stark contrast to what was to come. 

As we know, Moderna’s ability to rapidly produce a vaccine for the COVID-19 virus changed the financial prospects for the company and put it in a completely different position today. In the most recent quarter, Q1 of 2022, Moderna’s revenue was $6.1 billion and net income was $3.7 billion. That’s a far cry from the full-year results of just a few years ago.

But the past is the past, and what matters is what happens next. Here are three things about Moderna that smart investors know.

1. COVID-19 revenue will decrease but remain

As much as I wish it were not the case, it appears that Moderna will see COVID-related revenue for the foreseeable future. The most immediate catalyst is the recently received Emergency Use Authorization for Moderna’s COVID-19 vaccine for children 6 months of age and older. This was the last age group in the U.S. to receive approval to be vaccinated and should help sustain COVID-related revenues for Moderna.

When you consider the global vaccine demand, as well as the need for boosters and possibly new vaccines to combat future variants, there’s still a large market for sales worldwide. In Q1, Moderna reported it had approximately $21 billion in advanced purchase agreements for 2022. The company also believes that sales in the second half of 2022 will be slightly higher than in the first half. This revenue is a far cry from the pandemic highs, but it won’t decrease to zero anytime soon.

2. There’s more in the pipeline

While Moderna’s COVID-19 vaccines get the headlines, there are another 46 development programs in the company’s pipeline. Of these programs, Moderna has three programs in phase 3 trials. One program is its COVID-19 boosters, but there are also vaccines for two other viruses nearing their trial endpoints.

Respiratory syncytial virus is one of the leading causes of severe respiratory illness in older adults as well as younger children. The vaccine for older adults is currently in phase 3 trials, and the vaccine for children is in phase 1. A vaccine for cytomegalovirus, the leading cause of birth defects in the U.S., is also undergoing phase 3 trials.

By the end of Q2, Moderna hopes to add an Omicron-specific COVID-19 booster as well as a flu vaccine to its list of programs in phase 3 trials. 

There’s no guarantee that any of these programs will reach commercial sales, but with dozens more products in the pipeline at various stages, it would be reasonable to invest with the expectation that Moderna is able to bring additional products to market.

3. The current valuation is a double-edged sword

It’s clear that the market has priced in the uncertainty around Moderna’s ability to bring future products to market. At the time of this writing, Moderna has a price-to-earnings ratio of 4.3, near its all-time low of 3.4. This is for good reason. While COVID-19 revenue is likely to remain, it won’t return to its peak levels, and even if all the programs in phase 3 trials come to market, the revenue won’t replace what’s lost in COVID-19 sales. 

That said, the COVID-19 vaccines have shown that mRNA technology can be successful, and the revenue generated over the past few years has put Moderna in a much better position to finance the development of future products. There’s risk in buying shares, but there’s also reward if Moderna can replicate its past success with future vaccines.

The bottom line for investors

Whether or not to buy shares depends on each investor’s risk tolerance and investing timeline. There’s reason to believe that over the long term, Moderna can grow to be a mainstay in the biotech space. As biotech investments go, there are certainly more risky investments out there. If Moderna is able to bring more and more products to market over the coming years and decades, it has the chance to be a smart investment for shareholders.

I think Moderna provides a nice balance of risk/reward because the valuation is such that investors don’t need a COVID-like pop for the investment to be successful. However, investors who buy shares expecting another short-term run-up like we’ve seen over the past few years are likely to be disappointed. 

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

The post 3 things about Moderna that smart investors know appeared first on The Motley Fool Australia.

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More reading

• Should you really buy stocks now or wait a while longer?

Jeff Santoro has positions in Moderna Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Moderna Inc. 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.

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

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The Fortescue Metals Group Limited (ASX: FMG) share price reversed its year-to-date gains in June.

For the month, the iron ore producer’s shares dropped 13% to finish at $17.53 on 30 June.

This was a worse performance than the S&P/ASX 200 Index (ASX: XJO), which declined 9% over the same timeframe.

And looking at the start of the new month, Fortescue shares are yet again tumbling today.

At the time of writing, the mining outfit’s shares are down 2.05% to $17.17.

What’s caused Fortescue shares to plummet?

While it was a quiet month for the company, the deterioration of iron ore prices led Fortescue shares lower in June.

In particular, the steel making ingredient closed at a six-month low of US$127.92 per tonne last week. While there has been a slight rebound, it’s still heavily down from when it was tracking around the US$146 mark earlier this month.

Currently, the price of iron ore is US$130 per tonne.

Furthermore, a wider fall across the ASX put severe selling pressure on the Fortescue share price.

The S&P/ASX 300 Metals and Mining (ASX: XMM) sector sank close to 15% in June.

This was brought upon by investor concerns regarding rampant inflation and aggressive rate hikes from the Reserve Bank of Australia.

What do the brokers think?

A couple of brokers rated Fortescue shares with varying price points at the beginning and end of the month.

As reported by ANZ Share Investing, the team at RBC Capital Markets raised its price target by 6% to $17.00 for Fortescue shares.

Based on today’s price, this is relatively in line with the market’s consensus.

However, last week, Morgan Stanley put out a more bearish note, slashing its rating by 11% to $14.20.

This implies a downside of 17% from where the Fortescue share price trades today.

Fortescue share price summary

Since the beginning of the calendar year, the Fortescue share price has continued to move in circles.

Down 10% for the period, this goes against the company’s historical share price trends of triple-digit gains.

It’s worth noting that Fortescue shares are not far off their 52-week low of $13.90 that was hit in October 2021.

On valuation grounds, Fortescue commands a market capitalisation of roughly $56.65 billion.

The post How did the Fortescue share price perform in June? appeared first on The Motley Fool Australia.

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More reading

• These ASX 200 mining shares are digging a deeper hole on Friday
• What’s dragging on the Fortescue share price today?
• How have ASX 200 mining shares fared over June?
• Which ASX 200 mining share offers the best dividend yield for FY22?
• How does the Fortescue dividend compare with its peers over the last 5 years?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The All Ordinaries Index (ASX: XAO) is in the green today, gaining 0.5%. It’s being bolstered by these All Ords shares, each boasting gains of more than 20%.

3 All Ords shares gaining more than 20% today

MoneyMe Ltd (ASX: MME)

The MoneyMe share price is launching higher on Friday, gaining nearly 25% to trade at 71 cents.

The consumer credit business announced it has completed its inaugural term securitisation of personal loan customer receivables this morning.

On top of that, the company increased the capacity of its Autopay warehouse from $300 million to $450 million last month.  

The two events, along with existing arrangements, have increased its external securitisation funding facilities to $1.65 billion, with $388 million of undrawn capacity.

Praemium Ltd (ASX: PPS)

Fellow All Ords constituent Preamium is also seeing its share price rocket higher on Friday. The wealth management-focused tech company’s stock is lifting 20.43% right now to trade at 56 cents.

Its gain follows news the company has successfully divested its international businesses and will now focus on its domestic leg.

The company sold its operations in the United Kingdom, Dubai, Hong Kong, and Jersey for 35 million British pounds sterling.

“This successful divestment will allow Praemium to focus on the enormous opportunity that the Australian wealth market offers,” Praemium CEO Anthony Wamsteker said.

The company plans to return approximately $50 million to shareholders through a special dividend and on-market buy-back following the sale.

Atomos Ltd (ASX: AMS)

Finally, ASX All Ords tech share Atomos is taking off on Friday. Right now, its stock is swapping hands for 24 cents apiece, a 26.32% improvement on its previous close.

Interestingly, no news has been released by the company since the end of May.

However, it did finish yesterday’s session at an all-time low of 19 cents.

The post These 3 ASX All Ords shares are delivering double-digit gains on Friday appeared first on The Motley Fool Australia.

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More reading

• What’s propelling the MoneyMe share price 28% higher today?
• Domestic bliss: Praemium share price surges 18% after international business split
• 3 ASX All Ords shares dodging selling pressure on Wednesday
• These 3 ASX All Ordinaries shares are hitting new 52-week lows today
• These 2 ASX tech All Ords shares are hitting new 52-week lows today

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 positions in and has recommended Atomos Ltd and Praemium Limited. The Motley Fool Australia has recommended Praemium 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 S&P/ASX 200 Index (ASX: XJO) is enjoying a moderately positive end to the trading week so far this Friday. At the time of writing, the ASX 200 is up by 0.15%, close to 6,580 points. But the Zip Co Ltd (ASX: ZIP) share price is doing far better.

Zip shares are on fire today. The buy now, pay later (BNPL) company is now up by a pleasing 11.36% at 49 cents per share after it closed at 44 cents yesterday (a new 52-week low).

So what’s behind this impressive performance this Friday?

Well, the first thing to note is that, although Zip is having a spectacular day today, it hasn’t exactly made up for its recent bout of underperformance just yet. Even after this move, the zip share price remains down by almost 12% over the past five trading days alone. It’s also lost more than 40% over just the past month, and more than 88% in 2022 thus far.

Why are Zip shares rocketing 11% today?

So there’s always the possibility that investors have simply decided Zip has gone low enough, and are bidding the shares back up today.

But we also have some news to discuss which could be playing a role here.

Zip’s fellow BNPL share Openpay Ltd (ASX: OPY) has put out an “operational update” today. This confirmed to investors that the company was pulling out of the United Kingdom market, as well as implementing an indefinite “pause” for its existing US operations.

On this news the Openpay share price has risen a whopping 25% so far today, rising from 12 cents to 15 cents. This could be flowing through to the Zip share price today as well.

Whatever the true reason for Zip’s rocket-like gains today, it will no doubt be a welcome development for shareholders.

At the current Zip share price, this ASX 200 BNPL company has a market capitalisation of $333.6 million.

The post Why is the Zip share price jumping 11% today? appeared first on The Motley Fool Australia.

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• Why did the Zip share price crash more than 50% in June?
• June was a terrible month for ASX BNPL shares. Here’s why
• These were the worst performing ASX 200 shares in June
• Could ASX BNPL shares be set for imminent regulation as spending swells to $12 billion?
• Zip shares sink 6% despite BNPL spend doubling this financial year

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended 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 brutal second half of FY22 has battered ASX 200 retail share prices, but experts believe some are poised to make a comeback in this new financial year.

The surge in the cost of living, slowing economic growth and the threat of falling home values is sapping consumer confidence.

This has prompted brokers to cut their earnings forecasts for S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) shares.

ASX 200 retail shares in the reject bin

Little wonder that around 85% of shares in the sector have underperformed the 13% drop in the S&P/ASX 200 Index (ASX: XJO) in the last six months.

Some of the worst performers include the Domino’s Pizza Enterprises Ltd (ASX: DMP) share price and Breville Group Ltd (ASX: BRG) share price. The fast-food chain and the home appliance group shed more than 40% of their value in 2H FY22.

Meanwhile, the Wesfarmers Ltd (ASX: WES) share price and Lovisa Holdings Ltd (ASX: LOV) share price have shed around 30% each.

A few tailwinds

However, it isn’t all bad news. Analysts believe some ASX 200 retail shares are now well-priced following the sell-off.

JP Morgan also noted that consumers have a $250 billion savings buffer to draw on, reported the Australian Financial Review. Its analysts Bryan Raymond and Chris McKegg said:

The optics around year-on-year declines will clearly be large given the very high base, but we expect the trough sales and margin levels in the financial year 2024 to be better than share prices are factoring in.

Another broker that’s cautiously optimistic is Wilsons. Its analyst John Hynd thinks the market reaction over the last four to six months looks “pretty extreme”, according to the AFR.

Hynd explained:

The [retail spending] data continues to surprise on the upside, given we saw variable interest rates increase in May and the consumer has that expectation that rates are going to continue to increase – yet they’re still willing to spend.

However, I think it’s too early to call whether consumers will be resilient through the rate cycle.

ASX 200 retail shares to watch in FY23

Nonetheless, both brokers see value in the sector. JP Morgan likes the Super Retail Group Ltd (ASX: SUL) share price and Harvey Norman Holdings Limited (ASX: HVN) share price.

Meanwhile, Wilsons’ top pick is the City Chic Collective Ltd (ASX: CCX) share price. It reckons the plus-size clothing retailer can weather the economic turmoil due to its niche offering, sticking customers and high-quality offering.

The post Embattled ASX 200 retail shares primed for a comeback: experts appeared first on The Motley Fool Australia.

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More reading

• Why is the Northern Star share price more green than gold on Friday?
• ASX 200 midday update: Regis Resources jumps, BHP and Rio Tinto drop
• These ASX 200 mining shares are digging a deeper hole on Friday
• Why did the Soul Pattinson share price go backwards in June?
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Harvey Norman Holdings Ltd. and Super Retail Group Limited. The Motley Fool Australia has positions in and has recommended Harvey Norman Holdings Ltd., Super Retail Group Limited, and Wesfarmers Limited. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited and Lovisa Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Xero Limited (ASX: XRO) share price has started the month in a positive fashion.

In early afternoon trade, the cloud accounting company’s shares are up 2% to $78.71.

Why is the Xero share price pushing higher?

As well as getting a boost from a rebound in the tech sector, the Xero share price has been given a lift from a bullish broker note.

According to a note out of Morgans, its analysts have initiated coverage on the company with an add rating and $90.25 price target.

Based on the current Xero share price, this implies potential upside of almost 15% for investors over the next 12 months.

What did the broker say?

Morgans notes that Xero has a huge market to grow into and opportunities to boost its earnings from value added services via its app store.

XRO has a significant runway for customer growth with <10% penetration of a 45m+ SMB Total Addressable Market (TAM). We see additional earnings upside from platform / ancillary value-added services and margin expansion.

The broker has, however, warned that it could be a bumpy road ahead for the Xero share price. This is due to the market having difficulty deciding on which valuation method to use for its shares given its propensity to reinvest in its growth.

Execution risk and time value of money are the key operational considerations. What valuation framework investors are prepared to use is the greatest unknown. The subjectivity of this will create share price volatility along the way.

‘A top tech exposure’

Nevertheless, the broker believes Xero is a high quality company, with strong growth potential in an industry with high barriers to entry.

It summarises:

XRO boasts strong customer advocacy, significant barriers to entry, scalability and LTV at ~7x CAC. It should continue to grow earnings/FCF above economic trend and is profitable and liquid. We rate it highly and it appears others do as well. A key risk is XRO trades on large short-term multiples. If we remove FY22F “investing for growth” CAC, XRO trades on a ~2.2% FCF yield. Rising interest rates are a net negative for XRO’s share price and growth companies. However, XRO should be a top tech exposure due its high quality.

The post Why this top broker just slapped a buy rating on Xero shares appeared first on The Motley Fool Australia.

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More reading

• Here’s why ASX 200 tech shares are taking a beating on Wednesday
• Why is the Xero share price slipping 6% today?
• Why are ASX tech shares struggling today?
• Analysts tip big returns from these ASX growth shares
• What was the highest ever Xero share price?

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 Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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After its merger with Saracen Mineral Holdings last year, Northern Star Resources Ltd (ASX: NST) is now one of the largest listed ASX gold miners on the share market. But that hasn’t saved Nothern Star shares from a rough ride this week. Since last Friday’s close, the Northern Star share price has fallen by around 11%.

Despite this, today has seen the gold miner rebound slightly. The Northern Star share price is currently up 3.8% at $7.10.

That comes after Northern Star hit another new 52-week low this morning soon after market open. The company dropped as low as $6.79 today before shooting back up. A rough ride indeed.

But with the Northern Star share price rebounding today, and by far more than the broader S&P/ASX 200 Index (ASX: XJO) too, you might expect the gold price to be rising.

But you’d be wrong. The price of gold has actually fallen over the past 24 hours or so. The yellow metal was asking US$1,825 an ounce yesterday. But today, it has dropped to US$1,806 a the time of writing.

What’s going on with the Northern Star share price today?

The rising Northern Star share price could be a byproduct of the news we heard this morning about a fellow ASX gold miner.

As my Fool colleague James covered earlier today, there are reports that mining billionaire and CEO of Fortescue Metals Group Limited (ASX: FMG), Andrew Forrest, was seeking to acquire a 15% stake in gold miner Regis Resources Limited (ASX: RRL). Twiggy was apparently happy to buy this stake at $1.48 per share.

The Regis share price closed at $1.30 on Thursday but has rocketed almost 11% so far today to $1.44, presumably on this news. However, The Australian has since reported Forrest has abandoned the plan after failing to aquire the stake for $168 million.

We also see other ASX gold miners such as Evolution Mining Ltd (ASX: EVN) rising today as well, up 2.5%.

So, this vote of confidence for a fellow ASX gold miner from one of Australia’s richest people could be flowing through to the Northern Star share price.

Northern Star has a market capitalisation of $8.04 billion, with a dividend yield of 2.77%.

The post Why is the Northern Star share price more green than gold on Friday? appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: Regis Resources jumps, BHP and Rio Tinto drop
• These ASX 200 mining shares are digging a deeper hole on Friday
• Why did the Soul Pattinson share price go backwards in June?
• 5 things to watch on the ASX 200 on Friday
• These were the best performing ASX 200 shares in June

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) is in the green despite a notably poor performance from energy shares on Friday.

Right now, the S&P/ASX 200 Energy Index (ASX: XEJ) is down a whopping 1.38%.

For context, the ASX 200 is recording a gain of 0.35% at the time of writing.

Interestingly, the energy sector’s downfall is being led by some of its most renowned names.

Perhaps unsurprisingly, much of the turnaround is seemingly being driven by falling oil prices. Let’s take a look.

Energy shares dragging on ASX 200

The ASX 200 energy sector is in the red on Friday after oil prices tumbled despite continuous supply concerns overnight.

The price of Brent crude oil fell 1.2% to reach US$114.81 a barrel in Thursday’s session overseas while the West Texas Intermediate oil price tumbled 3.7% to US$105.76 a barrel.

It marks the first time in 2022 that oil prices recorded a month-on-month fall. WTI oil futures slumped 7.8% in June, according to Trading Economics.

The fall came after OPEC+ nations announced they would only increase August output by as much as was previously flagged, reports Reuters. That will see an additional 648,000 barrels per day hit the market.

That’s despite expectations that supply of the black liquid could tighten in the face of export halts, political disruptions, and strikes in Libya, Ecuador, and Norway.  

The commodity’s fall is likely weighing on the share prices of Santos Ltd (ASX: STO), Woodside Energy Group Ltd (ASX: WDS), and Worley Ltd (ASX: WOR). They’re currently down 1.4%, 2.2%, and 2.4% respectively. That of Beach Energy Ltd (ASX: BPT) is also down 0.6%.

Coal producing shares of New Hope Corporation Limited (ASX: NHC) and Whitehaven Coal Ltd (ASX: WHC) are also falling 3.1% and 1.6% respectively right now.

The post Why are ASX 200 energy shares dragging on the market today? appeared first on The Motley Fool Australia.

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More reading

• I loved this ASX share a year ago, and it’s still my long-term pick: expert
• 5 things to watch on the ASX 200 on Friday
• Santos shares go cold despite energy regulator outlining ‘crucial’ role gas will play for decades
• Own Soul Patts shares? Here’s how much of its portfolio is exposed to coal
• Why BWX, Sayona Mining, Tyro, and Woodside shares are sinking

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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