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The GUD Holdings Limited (ASX: GUD) tumbled to its lowest level since 2016 after its profit warning that prompted a leading broker to downgrade its shares.

The auto parts and water products manufacturer announced after the market closed yesterday that its FY22 underlying earnings before interest, tax and amortisation (EBITA) would come in at around $147 million.

That compares to its previous guidance of between $155 million and $160 million. The downgrade also sits around 10% below the census forecast.

GUD share price careens on downgrades

The GUD share price has crashed 20% to $7.67 at the time of writing, while the S&P/ASX 200 Index (ASX: XJO) is down 2.33%.

The profit downgrade prompted Citigroup to cut its recommendation on the company from buy to neutral.

The broker also lowered its price target by 36% to $9.95 a share. While the new target price implies a decent upside to where the GUD share price is sitting, that’s unlikely to provide much comfort to shareholders during these turbulent times.

Clouded by uncertainty

Citigroup explained:

We downgrade the stock to neutral reflecting increased uncertainty surrounding the earnings recovery, which is primarily reliant on OEM supply normalising, which may take longer than expected to recover and is outside GUD’s control. We also wait to see more evidence that gearing reduces from current levels.

GUD management blamed volatile supply chains, falling new vehicle sales and cost pressures for the downgrade.

The group has increased prices for its products and is planning to lift prices again in July and August, but this has yet to offset margin pressure.

Lack of new cars hurts GUD

Further, its ill-timed acquisition of AutoPacific Group is also hurting as new car sales volumes have been hampered by the lack of supply. This in turn is also dragging on its ECB (bullbars) and CSM (trays and fit-outs for utes) sales.

Citi said this news shouldn’t be a great surprise after competitor ARB Corporation Limited (ASX: ARB) issued a similar update last month.

One small bright spot

If there was a silver lining in GUD’s profit downgrade, it’s to do with the legacy auto parts business which the company said continued to see “solid demand”. Owners are forced to keep their vehicles for longer due to the shortage of new vehicles. This means more repairs and spare parts.

The readthrough is positive for the Bapcor Ltd (ASX: BAP) share price as well. Although this isn’t saving Bapcor from today’s brutal market sell-off, with its shares down 2.47% at $5.52.

The post Down 20% today: Why the GUD share price is crashing to a 6-year low appeared first on The Motley Fool Australia.

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More reading

• ‘Stellar performer’: Why this fundie is buying the dip in the NAB share price
• 5 things to watch on the ASX 200 on Friday
• Is a recession coming to Australia this year?
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Despite rising bond yields, here’s why I’ll keep investing in ASX shares

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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended ARB Corporation Limited and Bapcor. 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 A2 Milk Company Ltd (ASX: A2M) share price is defying the market selloff on Friday.

In morning trade, the struggling infant formula company’s shares are up 2.5% to $4.11.

Why is the A2 Milk share price rising today?

Investors have been bidding the A2 Milk share price higher today for a couple of reasons.

One is an update out of smaller rival Bubs Australia Ltd (ASX: BUB), which revealed strong sales growth in the second half. Though, this is predominantly being driven by its deal with the US government, which A2 Milk is not party to.

What else?

Another catalyst for the rise in the A2 Milk share price could be news that the Abbott Laboratories infant formula manufacturing plant in Michigan has shut down just a couple weeks after resuming production.

On this occasion, Abbott Laboratories was forced to close the plant due to flooding following inclement weather. Abbott commented:

Abbott has stopped production of its EleCare specialty formula that was underway to assess damage caused by the storm and clean and re-sanitize the plant. We have informed FDA and will conduct comprehensive testing in conjunction with the independent third party to ensure the plant is safe to resume production. This will likely delay production and distribution of new product for a few weeks.

This appears to have sparked hopes that the US government will come knocking on A2 Milk’s door for addition supply. Though, it is worth noting that Abbott’s manufacturing was going strong prior to this latest shutdown. It explained:

Abbott will have produced 8.7 million pounds of infant formula in June for the U.S., or the equivalent of 168.2 million 6 oz. feedings. This is 95% of what we produced in January, prior to the recall and does not include production from Sturgis.

Time will tell if A2 Milk benefits from this crisis.

The post Here’s why the A2 Milk share price is defying the market selloff on Friday appeared first on The Motley Fool Australia.

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More reading

• Where next for the A2 Milk share price?
• Why A2 Milk, Appen, Magellan, and Tyro shares are dropping today
• Is it time to buy A2 Milk and Treasury Wines for better China relations?
• These were the best performing ASX 200 shares last week
• What to do with these 3 pummelled ASX shares: advisor

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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk and BUBS AUST FPO. 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 Newcrest Mining Ltd (ASX: NCM) share price is shrugging off the latest sell-off on the ASX this morning.

At the time of writing, shares in Australia’s largest gold mining company are climbing 2.57% to $24.52.

In comparison, the S&P/ASX 200 Index (ASX: XJO) is yet again deep in the red by 2.32% to 6,438.4 points. This means the benchmark index has now lost more than 8% in the past week.

What’s going on with Newcrest?

Despite the company not providing any new announcements to the market today, investors are bidding up the Newcrest share price.

The price of gold has rebounded for a second consecutive session overnight to fetch close to US$1,850 per ounce.

After hitting a one-month low of US$1,805 on Tuesday, the yellow metal has seen an uptick following Wall Street’s slump.

Furthermore, momentum is shifting to safe-haven assets such as gold after the Federal Reserve handed down a 0.75% rate hike this week in an attempt to combat inflation.

For context, this is the largest interest rate rise by the United States central bank since 1994.

Also likely helping the Newcrest share price is the latest reports from UBS and Macquarie.

Both brokers are viewing the gold sector as a favourable choice amid the extreme volatility on the ASX.

According to The Australian, UBS upgraded Newcrest peer Evolution Mining Ltd (ASX: EVN) to a “buy” rating.

This appears to be having a positive effect on the other gold miners as recession fears mount again.

Newcrest share price summary

Regardless of edging higher today, the Newcrest share price remains relatively flat in 2022.

Although, when looking at the past 12 months, its shares have fallen by around 9%.

Newcrest commands a market capitalisation of approximately $21.35 billion.

The post Why is the Newcrest share price defying Friday’s sell-off? appeared first on The Motley Fool Australia.

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More reading

• Investing in ASX 200 gold shares? Here’s the latest on the gold price forecast
• 5 things to watch on the ASX 200 on Friday
• Why is the Newcrest share price glittering on Thursday?
• 5 things to watch on the ASX 200 on Friday
• Why has the Newcrest share price tumbled 9% in a month?

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 recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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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.

What happened 

Shares of Meta Platforms (NASDAQ: META), Amazon (NASDAQ: AMZN), and Apple (NASDAQ: AAPL) were all plummeting this morning following the Federal Reserve’s decision to raise the federal funds rate by 75 basis points yesterday.

The tech-heavy Nasdaq Composite fell 3.7% this morning, and the tech giants followed suit, with Meta losing 4.8%, Amazon down 4.2%, and Apple falling 3.5%.

So what 

The Fed is laser focused on bringing down inflation, which is at a 40-year high, but investors across all sectors are worried that aggressive rate hikes will slow the economy down too much and potentially even cause a recession.

Those fears were magnified after the Fed’s significant interest rate increase yesterday, which was its largest rate increase since 1994.

After an initial positive response to the rate hike in yesterday’s afternoon trading, investors are now growing increasingly concerned that the Federal Reserve will have to continue making elevated rate hikes throughout this year in order to tame inflation.

Meta, Amazon, and Apple investors may be latching on to comments made by Fed chairman Jerome Powell, who said yesterday that “from the perspective of today, either a 50-basis-point or a 75-basis-point increase seems most likely at our next meeting.” Though Powell said he doesn’t expect 75-basis-point hikes to be common.

While stocks across all sectors have fallen lately, technology stocks have especially taken it on the chin as some investors flee high-growth investments and look for safer places to put their money.

Meta, Amazon, and Apple investors, in particular, are likely worried that a potentially slowing economy could hurt Meta’s advertising business, while Amazon and Apple shareholders may be focusing on supply chain problems, rising material and shipping costs, and the potential for consumer demand for products to slow down in the months ahead.

Now what

While Meta, Amazon, and Apple shareholders are right to keep a close eye on the Fed’s moves and consider how the rake hikes could affect the economy, they should also try to keep a long-term perspective on their investments.

All of these companies have plenty of cash on hand to weather an economic storm, and they’ve already proved that they can withstand uncertain circumstances and adjust some of their business strategies, as they had to during the height of the pandemic.

That doesn’t mean that the stocks Meta, Amazon, and Apple won’t have more turbulent times ahead, but it’s worth remembering that keeping a five-year timeline (or longer) on your investments is the best way to keep yourself from overreacting while others are panicking. 

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

The post Why Meta, Amazon, and Apple shares were falling today appeared first on The Motley Fool Australia.

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More reading

• Why Amazon stock crushed the market today
• 2 Warren Buffett stocks to buy and hold forever
• Apple Is Starting to Walk and Talk Like a Bank. Could It Ever Become One?
• Amazon Just Split Its Stock: Here’s What Comes Next
• Better buy: Amazon vs. Alibaba

Chris Neiger has positions in Apple. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon and Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Amazon and Apple. 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 Link Administration Holdings Ltd (ASX: LNK) share price has been battered this week, tumbling 20.8% since last Friday’s close.

Some 10% of that fall occurred yesterday after Australia’s competition watchdog raised a red flag over the proposed acquisition of Link, and the company announced it’s being taken to the English High Court.  

Fortunately, the market appears reassured by the company’s confidence in its financial year 2022 guidance, outlined today.

At the time of writing, the Link share price is $3.34, 0.3% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently down 2.54%. Meanwhile, the company’s home sector – the S&P/ASX 200 Information Technology Index (ASX: XIJ) – is recording a 4.09% dip, with Link coming in as its top performer.

What’s going on with Link’s stock on Friday?

The battered and bruised Link share price is doing better than most on Friday amid the broader market’s stumble.

The ASX 200 is struggling today after Wall Street plunged overnight. The S&P 500 Index (SP: .INX) suffered a 3.25% fall in Thursday’s session while the Nasdaq Composite (NASDAQ: .IXIC) tumbled more than 4%.

But the Link share price is outperforming following yesterday’s 10.43% drop. Its about-face comes after the company released an announcement to the ASX this morning.

“Following elevated trading activity in shares of Link … on the ASX on 16 June 2022, Link Group affirms its [financial year 2022] guidance,” it told the market.

“Revenue is expected to increase by a low single-digit percentage and operating [earnings before interest and tax] is expected to be at least 5% higher relative to [financial year 2021].”

It comes after the Australian Competition and Consumer Commission (ACCC) flagged “significant preliminary competition concerns” regarding the proposed acquisition of Link by Dye & Durham yesterday.

The company noted the watchdog’s view was still preliminary and reconfirmed its recommendation of the takeover plan.

Additionally, Link disclosed legal proceedings are being brought against it in the English High Court on Thursday.  

The claim relates to its subsidiary’s role as authorised corporate director of the LF Equity Income Fund. The company has vowed to “vigorously defend” the claims.

Link share price snapshot

It likely goes without saying that 2022 has been rough on the Link share price.

The stock has slumped nearly 40% since the start of the year. It’s also trading around 32% lower than it was this time last year.

The post Down 20% this week, why is the Link share price outperforming today? appeared first on The Motley Fool Australia.

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More reading

• Why Humm, Inghams, Link, and Smartgroup shares are falling
• ASX 200 midday update: BHP’s NSW coal update, Link takeover on the rocks
• Double whammy: Link share price sinks 9% amid ACCC probe, litigation news

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 Link Administration Holdings 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 Scott Phillips.

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The Latitude Group Holdings Ltd (ASX: LFS) share price jumped from the gates and is now rangebound in early trade on Friday.

At the time of writing, it’s fetching $1.40 — the same as yesterday’s closing price — having already slipped more than 29% into the red this year to date.

In broad market moves, the S&P/ASX 200 Index (ASX: XJO) started down on Friday and is currently tracing 2% lower at 6,435. Returns for the last five trading days on each are below.

Latitude share price jumps amid cancelled deal

The company revealed today that its agreement to purchase Humm Group Ltd (ASX: HUM)’s buy now pay later (BNPL) business has been terminated. The transaction was valued at $250 million.

Latitude notes the decision to terminate was mutual.

In light of the current major disruption in financial markets, Latitude and Humm have mutually agreed to terminate the proposed sale of humm consumer finance (HCF) to Latitude.

Whilst investors have been driving up Latitude early today, the same can’t be said for the Humm share price. It’s tracking almost 14% lower at the time of writing.

The drop brings Humm’s losses to more than 45% for the year to date and 52% over the past 12 months.

Meanwhile, Humm said it continued to believe that HCF was a “high-quality business”.

“The board…intends to review HCF’s strategic direction to focus on its core products and markets in order to restore profitability,” it said.

Latitude’s attitude was a more upbeat, noting a small impact. It advised it was profitable and well-capitalised, with growth tailwinds.

“BNPL represents less than 1% of Latitude’s revenue and receivables,” the company said.

The Latitude share price is down more than 39% in the last 12 months.

The post Latitude share price lifts on cancelled Humm deal appeared first on The Motley Fool Australia.

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More reading

• Humm share price sinks 11% following termination of $250m BNPL sale to Latitude
• Why Humm, Inghams, Link, and Smartgroup shares are falling
• ‘A dud deal’: Why is the Humm share price falling on Thursday?
• Hmmm… Why is the Humm share price lagging its sector on Friday?

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 Humm Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Block Inc (ASX: SQ2) share price has come under pressure yet again on Friday.

In morning trade, the payments giant’s shares are down over 8% to a new ASX low of $80.64.

This latest decline means the Block share price is now down by over 54% since listing on the Australian share market in January.

Why is the Block share price tumbling today?

Investors have been selling down the Block share price today following a market selloff on Wall Street which has spread to the local market.

The selling was particularly severe on the Nasdaq index, which fell 4.1% during overnight trade.

And while Block’s US-listed shares are actually listed on the NYSE, they often move in tow with the tech-heavy Nasdaq index.

It isn’t just Block that is falling hard today. Also deep in the red are the likes of Altium Limited (ASX: ALU), WiseTech Global Ltd (ASX: WTC), and Xero Limited (ASX: XRO).

This has led to the S&P/ASX All Technology index following the Nasdaq’s lead and dropping 3.5% in morning trade.

Why the selling?

Investors were selling equities on Wall Street on Thursday night amid fears that the US Federal Reserve’s rate hike plans to tame inflation will cause a recession. This is despite the market rallying on the news just a day earlier.

Susan Schmidt of Aviva Investors summarised things well. She told CNBC:

Investor sentiment seems to only be able to focus on one thing at a time. Yesterday, the Fed delivered as people expected. It was combating the consumer price index data that was much higher than people expected and raised concerns about inflation being so aggressive. Investors are now remembering that the counter to this is a slowing of the economy.

The post Block share price sinks again and is now down over 50% since its ASX listing appeared first on The Motley Fool Australia.

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More reading

• Why Block, Nanosonics, St Barbara, and Woodside shares are dropping
• Why is the Block share price tumbling another 5%
• ASX 200 midday update: ResMed’s US$1bn acquisition, tech shares continue to sink
• Why BHP, Block, Harvey Norman, and PointsBet shares are sinking
• Why are ASX 200 tech shares getting hit hardest today?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Block, Inc., WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Block, Inc., WiseTech Global, and 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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Could sentiment towards ASX gold shares be starting to turn after a top broker highlighted the sector and upgraded the Evolution Mining Ltd (ASX: EVN) share price?

After all, gold hasn’t done much despite the global turmoil, rampant inflation, and market volatility.

While the precious metal may have held the line above US$1,800 an ounce as equities plunged, some may still feel disappointed that the safe haven hasn’t done more.

Evolution share price upgraded as sector underperforms

Some ASX gold shares, including Evolution Mining, have continued to underperform the  S&P/ASX 200 Index (ASX: XJO).

Over the past year, the Evolution Mining share price has tumbled 23%, while the Northern Star Resources Ltd (ASX: NST) share price has shed 17%. The Newcrest Mining Ltd (ASX: NCM) share price has also struggled, down 9%,

In contrast, the ASX 200 has declined around 12% over the same period.

Low bar for ASX gold shares to jump

But UBS believes investors cannot afford to ignore ASX gold shares in this environment. The broker said:

Despite the continued operational delivery risks of production and costs, we are seeing more value in the ASX gold sector and more need to hedge the rest of our portfolio.

While they may get a little cheaper as we look forward to the Jun-Q 22 production reports and FY23 guidance, the bar has been set low and share prices have retreated.

Why the sector lost its shine

Sentiment towards the Evolution Mining share price and other ASX gold shares has been hurt by several factors. Production issues, tight labour markets, supply chain challenges, and cost pressures have dragged on the sector.

Given the poor start to production in FY22, UBS estimates that ASX gold shares will need a 30% improvement in the June quarter versus the previous quarter to meet their full-year guidance.

Is it time to buy ASX gold shares?

But there are also several factors that will support the sector. The waning Australian dollar is one, with the gold price at around a healthy $2,600 an ounce. This leaves our miners with a good margin buffer.

If the Aussie weakens further as US interest rate hikes outpace ours, profitability may improve further.

Additionally, the sector could deliver significant production growth of around 10% to 25% into FY23, added UBS.

Many ASX gold miners are also looking good value with the sector trading on sub-five-times enterprise value-to-earnings before interest, tax, depreciation, and amortisation (EV/EBITDA).

UBS picks the Evolution share price and these others

But this doesn’t mean all ASX gold shares are a buy. UBS explains:

We remain cautious into results season for risks to FY23 production and cost guidance, and retain a preference for new(er) mines benefiting from new infrastructure, highest grades and limited or brownfield capex [capital expenditure].

Size can also shield exposure to COVID risks like “key man” absenteeism and disruptions.

UBS upgraded the Evolution Mining share price to “buy” with a 12-month price target of $4.05 a share. It also likes the Northern Star share price along with that of SSR Mining Inc CDI (ASX: SSR), Gold Road Resources Ltd (ASX: GOR), and De Grey Mining Limited (ASX: DEG).

The post ‘The bar has been set low’: Why this top broker just upgraded the Evolution Mining share price appeared first on The Motley Fool Australia.

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More reading

• Investing in ASX 200 gold shares? Here’s the latest on the gold price forecast
• 5 things to watch on the ASX 200 on Thursday
• What’s with the Northern Star share price on Wednesday?
• Evolution Mining share price dips 8% in a week as Macquarie flags ‘earnings risk’ from energy crisis
• 5 things to watch on the ASX 200 on Wednesday

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

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The Vulcan Energy Resources Ltd (ASX: VUL) share price is taking a tumble, down 4.5% in early trade.

Vulcan Energy shares closed yesterday at $5.73 and are currently trading for $5.47.

This comes as the broader market is under pressure following another big sell-off in US markets overnight, with the All Ordinaries Index (ASX: XAO) down 2.2% at this same time.

Below we look at the key takeaways from the ASX lithium share’s progress update for its Zero Carbon Lithium Project, located in Germany.

What progress was reported?

The Vulcan Energy share price is sliding despite the company announcing that the German City Council of Landau has voted to support its geothermal energy production.

Tapping geothermal energy is a critical part of the company’s net carbon zero lithium production plans.

The council area covers part of Vulcan Energy’s geothermal production license at Insheim, along with the Landau Süd production license where the company has a brine offtake agreement with the operator. The Insheim region forms a core part of Vulcan’s Phase 1 development plans.

In its vote of support, the Landau Council said, “The lithium content in geothermally extracted thermal water in the Upper Rhine Graben offers a great opportunity to make an important contribution to combating the climate crisis.”

The Vulcan Energy share price also failed to lift off this morning despite the company reporting the acquisition of new exploration licenses. The 141 square kilometres of new licenses increase Vulcan’s exploration footprint in the Upper Rhine Valley Brine Field to 1,163 square kilometres.

Commenting on the developments, Vulcan Energy’s managing director, Francis Wedin said:

The Council has recognised that, in addition to being a source of renewable baseload heat, deep geothermal energy can also be used to extract lithium for electric vehicle battery production with a zero-carbon, zero fossil fuel footprint of production.

This marks an important step forward along the journey of the development of our dual geothermal energy and Zero Carbon Lithium business, which is widely recognised as vital not just to energy and critical raw materials supply security in Europe, but also to meeting Germany’s climate goals.

Vulcan Energy share price snapshot

The Vulcan Energy share price has struggled over the past 12 months, down 35%. That compares to a one-year loss of 13% posted by the All Ordinaries.

You’re unlikely to hear long-term shareholders complaining though.

Investors who bought Vulcan Energy shares in June 2018 will be sitting on gains of 2,506%.

The post Vulcan Energy share price tumbles despite positive lithium project update appeared first on The Motley Fool Australia.

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More reading

• Here’s why the Vulcan Energy share price is sinking 12% today?
• Which ASX lithium shares are producing and which are not?
• Why is the Vulcan Energy share price tumbling 6% today?
• 3 ASX mining shares billionaire John Hancock is buying for rising inflation and the energy transition
• Here’s why the Vulcan share price is charging 6% higher

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

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The Beach Energy Ltd (ASX: BPT) share price has sailed northwards these past few weeks. Despite the upside, its shares have also displayed wide volatility during this time and are currently down 4.68% at $1.63 in early trade today.

In broad market moves, the S&P/ASX 200 Energy Index (ASX: XEJ) has followed a similar path, having soared more than 30% this year to date, despite a recent pullback.

What’s up with the Beach Energy share price?

The Beach Energy share price was dancing around the $1.50–$1.70 level in April before a breakout in late May.

Surging markets for energy-based commodities have transposed over to ASX energy shares, with Beach nudging past its 52-week high around one week ago.

Brent crude oil continues its charge upward, now trading 8% higher in a month to US$119 per barrel. It’s surged around 63% in one year.

Meanwhile, natural gas continues to run higher, despite a sharp pullback over the last week or so.

The price action in these markets so far this year almost certainly mimics the activity in the Beach Energy share price, as seen below.

Beach is a price taker on these commodities, so it stands to reason its share price will fluctuate with volatility in the oil and gas markets.

Driving the rally in energy markets are a number of macroeconomic pressures, including supply chain bottlenecks, demand and supply mismatches, and the conflict in Europe.

Adding fuel to the fire is that Saudi Arabia, the world’s largest oil exporter, raised its oil prices for Asian customers – its biggest market.

This comes on the back of a stronger demand outlook from China, now the most recent spade of COVID-19 lockdowns look to be easing.

The Beach Energy share price has climbed 22% over the past 12 months and around 30% this year to date.

The post Despite recent volatility, the Beach Energy share price has still gained over the past 3 weeks. Here’s why appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 energy shares are up 40% so far this year. Can they run further?
• 5 things to watch on the ASX 200 on Friday

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 Scott Phillips.

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