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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a small gain. At the time of writing, the benchmark index is up 0.3% to 7,097.2 points.

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

Brambles Limited (ASX: BXB)

The Brambles share price is up 11% to $11.59. This follows news that the logistics solutions company is having takeover talks with private equity giant CVC Partners. However, the company has stressed that it hasn’t received a proposal yet. Brambles also warned that there is no certainty that the discussions will lead to a binding proposal being received.

Core Lithium Ltd (ASX: CXO)

The Core Lithium share price is up 3% to $1.18. Investors have been buying this lithium developer’s shares following a strong night for lithium shares on Wall Street on Friday. For example, lithium giants Albemarle, Sociedad Quimica y Minera de Chile (SQM), and Livent Corp rose 7%, 9.5%, and 12.5%, respectively, during Friday’s session.

Infomedia Limited (ASX: IFM)

The Infomedia share price has jumped 28% to $1.64. This has been driven by the news that the automotive industry software company has received a takeover offer. According to the release, the TA Consortium has offered $1.70 cash per share. This represents a 32.8% premium to the Infomedia share price prior to its trading halt.

Qube Holdings Ltd (ASX: QUB)

The Qube share price is up 6% to $2.95. This morning the logistics company announced the completion of its off-market share buyback. Qube has bought back $400 million of shares at $2.59 per share. This represents 154 million shares, which equates to 8% of its shares outstanding. The buyback price comprises a capital component of $1.61 per share and a dividend component of 98 cents per share.

The post Why Brambles, Core Lithium, Infomedia, and Qube shares are charging higher appeared first on The Motley Fool Australia.

More reading

• Why are ASX lithium shares off to such a flying start this week?
• ASX 200 midday update: Brambles rockets, Goodman upgrades guidance
• Here’s why the Brambles share price is rocketing 11% on Monday
• Why is the Core Lithium share price charging 7% higher?
• Infomedia share price rockets 30% following takeover approach

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 Infomedia. The Motley Fool Australia has recommended Infomedia. 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 Ramsay Health Care Ltd (ASX: RHC) share price is climbing higher into the green today.

This comes as the private hospital operator provider made an announcement to investors on the ASX.

At the time of writing, Ramsay shares are swapping hands at $78.31, up 1.49%.

In comparison, the S&P/ASX 200 Index (ASX: XJO) is giving back all its gains achieved during early morning trade. The benchmark ASX 200 is currently trading at 7,086.9 points, up just 0.17%.

What did Ramsay announce?

In its statement, Ramsay confirmed the details of funding guarantee arrangements for the period between 1 January and 30 June 2022.

Announced by the French Government on 14 May, the company said the structure of the decree was similar to prior periods. However, mental health has been excluded in the latest scheme.

While the details regarding the arrangement have not been disclosed, the previous corresponding period’s decree provided a guarantee of revenue equal to the average monthly revenue earned from the government.

Pulled from the 2020 calendar year, the revenue was indexed and multiplied by the six months covered by the decree.

About the Ramsay share price

After trading fairly flat for most of 2022, the Ramsay share price suddenly rocketed to a 52-week high of $84.58 in April.

The 25% gain came after the company received a $14.8 billion takeover offer from a consortium of investors led by KKR.

The Ramsay share price is up around 22% over the past 12 months and is trading 9% higher year to date.

Based on today’s price, Ramsay commands a market capitalisation of roughly $17.93 billion and has 228.88 million shares on hand.

The post Why is the Ramsay share price smashing the ASX 200 on Monday? appeared first on The Motley Fool Australia.

More reading

• Ramsay Health Care share price on watch amid Bupa contract termination
• These were the best performing ASX 200 shares in April
• ASX 200 midday update: ResMed disappoints, PointsBet rockets higher
• Ramsay Health share price bleeds as profits plunge
• These were the best performing ASX 200 shares last week

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 Ramsay Health Care 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 Mineral Resources Limited (ASX: MIN) share price has suffered in the past month, but could it recover?

The mining services provider’s shares have fallen more than 13% from $63.20 at market open on 19 April to their current share price of $54.74

Let’s take a look at the outlook for Mineral Resources.

Could the Mineral Resources share price go higher?

Mineral Resources may have had a tough month, but multiple brokers are optimistic about the company’s share price.

Goldman Sachs is positive on the outlook for the company that also has interests in lithium, iron ore, and manganese. Goldman recommends Mineral Resources as a buy and has a $73.80 price target on the company’s shares. This is nearly 35% more than the share price at the time of writing.

Analysts predict Mineral Resources [earnings before interest, tax, depreciation and amortisation] EBITDA could double to A$2 billion in FY 2023.

Macquarie has placed an $85 price target on Mineral Resources, the Australian Financial Review reported. This is a 55% upside on the current share price. Macquarie analysts, however, cautioned iron ore and lithium prices could weigh on future earnings. They said:

Movements in spot iron-ore and spodumene prices present the most material risk to our earnings forecasts for Mineral Resources.

Mineral Resources recently achieved milestone lithium production at the Wodinga project in Western Australia. The company is also exploring lithium at Mt Marion. Commenting on the news, CEO Paul Brown said: “Achieving first spodumene concentrate production at Wodgina is a great milestone.”

My Foolish colleague Bernd recently reported Tribeca Global Natural Resources CEO Ben Cleary prefers ASX lithium shares at lithium production stage. He noted Mineral Resources in one of the top two lithium share holdings held by the Tribeca Global Natural Resources Fund.

Share price snapshot

The Mineral Resources share price has surged 23% in the past year, but has fallen around 2.4% year to date.

For perspective, the S&P/ASX 200 Materials Index (ASX: XMJ) has fallen 4% in a year.

Mineral Resources has a market capitalisation of about $10.3 billion.

The post The Mineral Resources share price has dumped 13% in a month. Time to dig in? appeared first on The Motley Fool Australia.

More reading

• Why are ASX lithium shares off to such a flying start this week?
• What will the lithium price be in 2025?
• Top brokers explain why not all ASX lithium shares are created equal
• Brokers name 3 ASX lithium stocks to buy now
• What’s dragging the Mineral Resources share price lower on Tuesday?

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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Once a 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:

• Flight Centre Travel Group Ltd (ASX: FLT) remains the most shorted share on the ASX for another week after its short interest rose to 17.3%. Some traders appear to believe the market is too optimistic on the travel industry recovery.
• Betmakers Technology Group Ltd (ASX: BET) has seen its short interest surge to 16.6%. This betting technology company’s shares have fallen heavily this year amid valuation and cash burn concerns.
• Nanosonics Ltd (ASX: NAN) has short interest of 12.2%, which is down week on week. Uncertainty caused by a major change to this medical device company’s sales model in the United States has put pressure on its shares.
• Polynovo Ltd (ASX: PNV) has seen its short interest rise to 10.6%. This is despite the medical device company reporting heavy insider buying recently. Though, there is a lag with short seller data, so we may not know if short sellers have been spooked into closing positions by the insider buying until next week.
• Kogan.com Ltd (ASX: KGN) has seen its short interest ease to 10.1%. Short sellers have been going after this ecommerce company due to its poor performance and rising competition from Amazon.
• EML Payments Ltd (ASX: EML) has seen its short interest remain flat at 10%. This payments company has become a target of short sellers after it downgraded its profit guidance following a tough third quarter. There are regulatory concerns also weighing on sentiment.
• Webjet Limited (ASX: WEB) has short interest of 9.6%, which is up week on week. This online travel agent is releasing its half year results later this week. Judging by the increase in short interest, short sellers aren’t expecting a strong result or guidance.
• Appen Ltd (ASX: APX) has seen its short interest rise to 9.15%. There are concerns that Appen could be facing softening demand due to some companies taking parts of their machine learning in-house.
• AMA Group Ltd (ASX: AMA) has 9.1% of its shares held short, which is up week on week once again. There are concerns about this smash repair company’s high debt load and dwindling cash balance.
• Redbubble Ltd (ASX: RBL) is back in the top ten with short interest of 8.9%. A disappointing underperformance in FY 2022 and less effective marketing for ecommerce companies (from privacy changes) have been weighing on sentiment and Redbubble’s shares.

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

More reading

• What’s going on with the Polynovo share price today?
• What’s boosting the Flight Centre share price on Monday?
• ASX 200 midday update: Brambles rockets, Goodman upgrades guidance
• Top brokers name 3 ASX shares to buy next week
• These were the best performers on the ASX 200 last week

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 Appen Ltd, Betmakers Technology Group Ltd, EML Payments, Kogan.com ltd, Nanosonics Limited, POLYNOVO FPO, and REDBUBBLE FPO. The Motley Fool Australia has positions in and has recommended EML Payments, Kogan.com ltd, and Nanosonics Limited. The Motley Fool Australia has recommended Betmakers Technology Group Ltd, Flight Centre Travel Group Limited, and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The AGL Energy Limited (ASX: AGL) share price has bounced back from a rough start on Monday. Its struggle comes amid more reports of activist organisations slamming the company’s planned demerger.

At the time of writing, the AGL share price is $8.42, 0.24% higher than its previous close.

Though, it spent much of this morning in the red, trading for as low as $8.36 – a 0.4% slip.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is recording a 0.22% gain on Monday.

Let’s take a closer look at the latest criticism aimed at the split that will see AGL’s energy retail business become AGL Australia and its generation business transform into Accel Energy.

AGL demerger faces more heat

The AGL share price has rebounded after a disappointing morning’s trade. Its recovery came amid reports that London-based activist investment firm Snowcap has once again voiced its disapproval of the company’s demerger.

If this all sounds a bit familiar, it’s likely because Snowcap released a dossier detailing its disapproval of the demerger in February. Then, it said the split was “value destructive and environmentally disastrous”.

It also said the AGL share price could have an upside of 30% to 60% if the company ditched its demerger and transitioned away from coal-fired power by 2030. And that view reportedly hasn’t changed.

A Snowcap spokesperson has been quoted by the Australian Financial Review commenting on the company’s demerger scheme booklet:

We were extremely underwhelmed – 356 pages and still not one good reason why AGL should split in two.

It’s increasingly apparent to us that the demerger exclusively serves the interests of AGL’s leadership and advisers, leaving shareholders to pick up the $260 million bill.

The activist firm also welcomed the 11.28% stake in AGL recently picked up by Mike Cannon-Brookes’ Grok Ventures.

It reportedly said it was “encouraged” to see a fellow shareholder both disapprove of the demerger and envisage a greener future for the company.

Similar sentiments have also come from the Australasian Centre for Corporate Responsibility (ACCR) and Greenpeace.

The former pointed to a 2021 shareholder vote wherein 54% of AGL investors urged the company to establish Paris Agreement-aligned emissions targets.

ACCR director of climate and environment Dan Gocher said AGL’s plan to demerge “ignores the majority of its shareholders”.

AGL share price snapshot

Despite plenty of controversy, the AGL share price has been performing well in 2022.

It has gained 33% since the start of the year, outperforming the ASX 200 by around 40%.

However, the company’s stock and the index are both approximately equal with where they were 12 months ago.

The post AGL share price bounces back amid latest demerger opposition appeared first on The Motley Fool Australia.

More reading

• How dependant on coal closure is the AGL share price?
• AGL share price lifts despite Greenpeace accusing leadership of being ‘caught with their pants down’
• Is Cannon-Brookes getting ready to pitch a third takeover bid for AGL shares?
• Own AGL shares? Expert warns Cannon-Brookes’ stake might not be all it seems
• Cannon-Brookes warns AGL dividends at risk from demerger

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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Last week’s US$45 billion stablecoin meltdown rippled across almost every crypto asset.

The biggest hits came for investors in TerraUSD (CRYPTO: UST), backed by digital token Terra (CRYPTO: LUNA).

You can find the details of last Wednesday’s crypto meltdown here.

But in a nutshell, UST is an algorithmic stablecoin that’s intended to be pegged to the US dollar. Part of the mechanism intended to keep it trading in line with US$1 was a system that enabled anyone holding UST to swap it out for US$1 worth of LUNA at any stage.

However, when investors lost confidence in the peg, the token entered a rapid spiral, tumbling to 30 US cents as LUNA fell far more.

The ripple effects of the selloff hit the rest of the market, seeing even the biggest tokens like Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) sell off sharply. By the time the smoke cleared, the combined crypto sector had shed some US$270 billion.

What’s happening now?

Despite financing efforts by Terra to regain the dollar peg, the token is currently trading for a lowly 17.7 US cents.

As for LUNA? It’s down 99.99% since this time last week, worth 0.02594 US cents.

Commenting on the carnage, founding partner of Castle Island Ventures Matt Walsh said (as quoted by Bloomberg), “It’s something the scale of which crypto has really never seen in terms of a top-five project just absolutely imploding.”

In a caution to newbie crypto investors, managing partner at Multicoin Capital Kyle Samani added, “The biggest losers from all of this will be retail [investors] that didn’t understand the risks they were taking.”

Can regulators prevent another crypto stablecoin meltdown?

When that much money gets wiped off the boards in a matter of hours, you can bet it draws the attention of corporate regulators.

Speaking at the Financial Services Institute of Australasia event in Sydney on Friday, Reserve Bank of Australia deputy governor Michele Bullock warned of increasing risks to broader financial markets as the market valuations of stablecoin and other cryptos grow.

As the Australian Financial Review reports, Bullock noted that “stablecoins are not so stable any more”, adding that “the crypto world is causing problems for everyone at the moment… Everyone is nervous about the implications, particularly for consumers.”

Bullock said stablecoins “are not big enough at the moment to cause [a] financial stability issue”. However, she warned, “Their links to the financial system are increasing, so there is potential there for risks to rise, and rise quite quickly.”

Australian Prudential Regulation Authority chairman Wayne Byres agreed that stablecoins needed stronger regulation. But with most cryptos created outside of the traditional banking industry, Byres questioned whether agencies like APRA were suited for that role.

According to Byres (quoted by the AFR):

It is not obvious to me that the role that might be needed when it comes to stablecoins is necessarily one for the prudential regulator as such. But I think it is clear – and is certainly absolutely worthy of consideration – that as these sorts of digital currencies move more into the mainstream, that there is going to be some form of regulatory requirements.

Some will be protective and some will be helpful to facilitate an orderly market developing.

While crypto investors can almost certainly expect more regulations in the stablecoin segment, those could be some time coming.

In the meantime, be aware that just because a token is pegged to a certain fiat currency or asset, it’s no guarantee it will trade for that value.

The post Can regulators prevent another US$45 billion crypto stablecoin meltdown? appeared first on The Motley Fool Australia.

More reading

• 2 cryptocurrencies that could dwarf Shiba Inu
• Is the Bitcoin price heading all the way back down to US$20,000?
• How is the Bitcoin ETF (EBTC) performing compared to the ASX on Friday?
• Could the next crypto collapse flow through to ASX shares?
• Crypto crash: Why Bitcoin, Ethereum, and Dogecoin are struggling again

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Shares of battery technology company Novonix Ltd (ASX: NVX) have lifted on Monday and now trade 1.36% in the green at $3.73.

The Novonix share price has traded as high as $3.98 and as low as $3.71 up until the point of writing.

In wider market moves, the S&P/ASX All Technology Index (ASX: XTX) is trading more than 1.8% higher as ASX tech shares begin to show signs of life. Early in the day the tech index reached a 3.8% peak.

What’s up with Novonix shares?

Shares in the company have collapsed from their former glory after shifting downwards at pace over the last six months.

In that time, shares have crumbled from a high of $12.15 to their current levels – a collapse of 69%.

This year to date, shares have faltered 59.4%, meaning Novonix needs to rally ~150% to return to these former highs.

Brokers aren’t constructive on the stock either – it has extremely narrow coverage, and just one analyst, Morgans, advocates its clients to hold Novinix shares at present, according to Bloomberg data.

However, tech shares are showing signs of life once more on Monday. The index tracking the sector has levelled off in today’s session and is running in the green, resulting in a sector-wide rally across many beaten-down names.

As such, companies like Novonix are benefitting from the resurged confidence, as hungry investors look for a cheap meal during market hours on Monday.

Trading volume is also at 60% of its four-week average as investors continue bidding up Novonix shares on Monday.

Novonix share price snapshot

Despite its difficulties this year, the Novonix share price has held onto a 96% gain over the last 12 months.

In the past month, however, it has collapsed 39% into the red.

Based on the current share price, Novonix presides a market capitalisation of $1.78 billion.

The post Novonix share price fights to stay in the green on Monday appeared first on The Motley Fool Australia.

More reading

• These were the worst performers on the ASX 200 last week
• Why is the Novonix share price down 9% today?
• The Novonix share price just rebounded 13%. Is it a buy?
• Technophobia? Why ASX 200 tech shares are getting hammered again
• Why is the Novonix share price down 6% 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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The Polynovo Ltd (ASX: PNV) share price rocketed as high as 8.65% during market open but has since fallen wayside.

At the time of writing, the medical device company’s shares are swapping hands at $1.32, up 1.54%.

This follows the All Ordinaries Index’s (ASX: XAO) lead which rose to an intraday high within the first hour of trade.

However, since then, the broader ASX index has given back its gains to fetch at 7, 328 points, up 0.28%.

Director tops up on Polynovo shares

An insider has again recently taken advantage of the Polynovo share price weakness to top up their holdings.

In its most recent statement, Polynovo revealed that its chair, David Williams picked up more shares.

In total, 181,532 Polynovo shares were bought through his subsidiary, Lawn Views Pty Ltd via an on-market trade.

The indirect acquisition occurred on 13 May, and the average price paid per Polynovo share was $1.2746.

This means that Mr Williams now has around 21.50 million fully paid ordinary Polynovo shares across all his holdings.

The above transaction equated to the value of more than $231,000.

It is worth nothing that in the beginning of May, Polynovo shares touched a 52-week low of 83.5 cents. Since then, a number of directors, particularly Mr Williams have made a series of purchases.

Polynovo share price snapshot

It appears that the latest purchases could be spooking short sellers to close on their positions. ASIC is due to release its short position report mid-week, which will indicate where Polynovo shares are at.

On 9 May, the company had a reported short interest of 10.54%. This puts Polynovo as one of the most shorted shares on the ASX.

Despite this month’s gains, Polynovo shares have fallen by around 50% over the past 12 months.

Based on today’s price, Polynovo commands a market capitalisation of roughly $860.19 million.

The post What’s going on with the Polynovo share price today? appeared first on The Motley Fool Australia.

More reading

• These were the best performers on the ASX 200 last week
• Why is the Polynovo share price surging 35% in 5 days?
• Why is the Polynovo share price rocketing 17%?
• Why EOS, Pendal, PolyNovo and Xero shares are charging higher
• Why BrainChip, PolyNovo, TPG, and Westpac shares are pushing higher

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 positions in and has recommended POLYNOVO FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX lithium shares are having a stellar start to the week amid improving market sentiment.

Shares in Pilbara Minerals Ltd (ASX: PLS) are trading 3.24% higher, while Core Lithium Ltd (ASX: CXO) shares are up 3.49%. Meanwhile, the Allkem Ltd (ASX: AKE) share price is climbing 1.53%.

Let’s take a look at what could be impacting lithium shares today.

Why are ASX lithium shares rising?

ASX lithium shares could be trading higher this week after Macquarie shared a positive outlook for the sector.

The broker suggested ASX investors ought to own lithium and rare earth shares, the Financial Review reported. As most people are likely aware, lithium and rare earths are considered vital components of the batteries that power EVs.

However, Macquarie did warn investors that electric vehicle (EV) sales in China dropped 39% in April amid COVID-19 lockdowns.

Lithium shares on the ASX also include Sayona Mining Ltd (ASX: SYA), LionTown Resources Limited (ASX: LTR) and Mineral Resources Ltd (ASX: MIN). Sayona is soaring 4.1%, while LionTown is up 2.86% today and Mineral Resources is climbing 1.3%. In earlier trade, the Mineral Resources share price jumped 3.65% before retreating.

Macquarie has placed an $85 price target on Mineral Resources, representing a 55% upside on the current share price of $54.73. Commenting on the company, Macquarie said:

Movements in spot iron-ore and spodumene prices present the most material risk to our earnings forecasts for Mineral Resources.

Mineral Resources is exploring lithium at Mt Marion and Wodgina in Western Australia. The company is also exploring iron ore and manganese. On 12 May, Mineral Resources announced the company’s first lithium output from the Wodgina project.

Commenting on this news, Mineral Resources chief executive Paul Brown said:

Achieving first spodumene concentrate production at Wodgina is a great milestone as we look to safely and efficiently build production momentum to meet significant global demand for lithium products.

Macquarie also tips lithium shares Pilbara Minerals, Allkem and LionTown Resources to “outperform”.

Share price snapshot

The Core Lithium share price has exploded 413% in the past 12 months, while Pilbara Minerals has surged 136%.

Allkem has rocketed 84% in a year, LionTown has soared 173% and Mineral Resources has leapt 22%.

Sayona Mining shares have increased more than 700% in a year.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has returned 1% in the past 52 weeks.

The post Why are ASX lithium shares off to such a flying start this week? appeared first on The Motley Fool Australia.

More reading

• Why is the Core Lithium share price charging 7% higher?
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• If you’d bought $10,000 of Pilbara Minerals shares 10 years ago, congratulations! Here’s what you’d have now
• Down 20% in a month, is the Pilbara Minerals share price a buy?

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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Australian shares have curled downwards after a strong start from the open on Monday. The benchmark S&P/ASX 200 Index (ASX: XJO) has given back early gains to now trade just nine basis points higher at 7,084.

After a good squeeze of the juice on opn, the ASX 200 began to turn south amid the release of the latest economic data from China.

Reportedly, the data came in much softer than expected, resulting in traders having to re-evaluate their views on the current state of the ASX.

What’s up with the ASX 200 today?

Data out of China on its economic growth has come in weaker than market expectations. As The Australian reports today, “China’s monthly economic activity data for April are even weaker than expected as COVID lockdowns appear to do more damage than expected.”

Underlying the weakness was China’s COVID-19 lockdown policy, reports say. Further, experts from Oxford Economics predict the resultant disruption from China could extend well into June.

Economist Tommy Wu, quoted by The Australian, said:

China’s economy could see a more meaningful recovery in the second half, barring a Shanghai-like lockdown in another major city.

Still, the risks to the outlook are tilted to the downside, as the effectiveness of policy stimulus will largely depend on the scale of future COVID outbreaks and lockdowns.

Consequently, both tech and industrials are leading the pack today, with the S&P/ASX 200 Industrials Index (ASX: XNJ) and the S&P/ASX All Technology Index (ASX: XTX) both up more than 2% on the day.

In the absence of any other market news, it appears that the economic data from China has had a material impact on Aussie shares today.

A bit more on the ASX 200

In the last 12 months, the index tracking the ASX 200 has held onto a more than 1% gain. However, it has slipped almost 5% into the red this year to date.

The post Why is the ASX 200 giving back the morning’s gains on Monday? appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Brambles rockets, Goodman upgrades guidance
• 5 things to watch on the ASX 200 on Monday
• These were the best performers on the ASX 200 last week
• These were the worst performers on the ASX 200 last week
• Here are the top 10 ASX shares today

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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