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A message from our CIO, Scott Phillips:

“G’day Fools. If you’re like us, you’re dismayed by the events taking place in Ukraine. It is an unnecessary humanitarian tragedy. Times like these remind us that money is important, but other things are far more valuable. And yet the financial markets remain open, shares are trading, and our readers and members are looking to us for guidance. So, we’ll do our best to continue to serve you, while also hoping for a swift and peaceful end to war in Ukraine.” 

————————————–

Rio Tinto Limited (ASX: RIO) will be terminating all commercial ties with Russia amid the Ukraine invasion.

The Rio Tinto share price dropped 7.73% today to close at $110.61. For comparison, the S&P/ASX 200 Index (ASX: XJO) climbed 1.1% today.

So how will this decision impact Rio Tinto?

Russia boycotted

Rio Tinto confirmed it is cutting ties with Russia, Reuters reported. In an email statement, a company spokesperson said: “Rio Tinto is in the process of terminating all commercial relationships it has with any Russian business.”

The decision has sparked speculation about Rio Tinto’s Queensland Alumina Limited refinery, based in Gladstone. Russian company Rusal has a 20% stake in this business.

Sources told the Sydney Morning Herald the joint venture has been placed “under immediate review”. However, the publication reported Rio may need to buy out Rusal’s stake in this venture.

Rusal is Russia’s largest aluminum producer. An expert predicted Rio’s move could tighten aluminum supply. In a Bloomberg article cited by Yahoo Finance, mining analyst at Shaw and Partners Peter O’Connor said:

Rio’s move could keep things tight in the aluminum market until trade flows can adjust.

Rio is said to not have any operational assets or employees in Russia or Ukraine. The company joins other giants including Shell PLC (NYSE: SHEL), BP PLC (NYSE: BP), and Exxon Mobil Corp (NYSE: XOM) in pulling out of Russia.

Rio Tinto share price snapshot

As my Foolish colleague Aaron reported earlier, Rio Tinto shares were trading ex-dividend today. Anyone who buys shares from today will miss out on the dividend, hence the share price fall.

The Rio Tinto share price has leapt 10% this year to date but has fallen 3% over the past 12 months.

In the past month, Rio Tinto shares have slipped by 5%, while they are down 10% over the past week.

Rio has a market capitalisation of about $41 billion based on its current share price.

The post Rio Tinto (ASX:RIO) is cutting all ties with Russia. What does this mean for the mining giant? appeared first on The Motley Fool Australia.

More reading

• Why Newcrest, Nickel Mines, Rio Tinto, and Woodside shares are dropping today
• ASX 200 (ASX:XJO) midday update: Rio Tinto goes ex-div, tech and travel shares rebound
• Here’s why the Rio Tinto (ASX:RIO) share price is sliding 7% today
• 5 things to watch on the ASX 200 on Thursday
• Record $36bn in dividends could help ASX share market recovery

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

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The Telstra Corporation Ltd (ASX: TLS) share price was one of the more interesting performers in the ASX today. As of market close, the telco was down by 1.02% at $3.88 a share. That’s after Telstra opened at $3.94 this morning. In stark contrast, the S&P/ASX 200 Index (ASX: XJO) enjoyed a robust day of gains today. The ASX 200 rose by a pleasing 1.1% at over 7,100 points. 

So what went on with Telstra shares?

Well, one possible cause might be the news that the telco is facing a class action. As my Fool colleague Tony covered today, the company is facing legal action from a former employee. Former staffer Jodi Wruck has reportedly filed a case in the Federal Court against Telstra after she was fired in December following a refusal to get a COVID-19 vaccine, as per the company’s vaccination policy. Wruck has also claimed that “at least seven” staff members have signed on as plaintiffs, which is the legal minimum to be classified as a class action. 

Telstra told the Motley Fool that “state and territory public health orders also required those performing essential telco work to be vaccinated”.

It’s unclear if this development did impact the Telstra share price today, but it is possible.

Telstra share price snapshot

Telstra shares have had a pretty miserly time of it over the year so far. In 2022, Telstra is still down by a notable 8.06% as it currently stands. It’s also down by close to 10% from the 52-week high of $4.31 per share share that we saw back in January. However, zooming out, the picture looks a lot brighter. Telstra remains up close to 27% over the past 12 months, and up almost 45% since October 2020.

At the current Telstra share price, this ASX 200 telco has a market capitalisation of $45.58 billion, with a dividend yield of 4.12%.

The post Why was everyone talking about the Telstra (ASX:TLS) share price today? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• Own Telstra shares? Here’s why the telco faces new legal action
• These 3 ASX 200 shares are topping the volume charts on Thursday
• ASX 200 (ASX:XJO) midday update: Rio Tinto goes ex-div, tech and travel shares rebound
• Warning: Only 4 ASX shares just added to ASX 300 are profitable

Motley Fool contributor Sebastian Bowen owns Telstra Corporation 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 owns and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Paladin Energy Ltd (ASX: PDN) share price surged 11% into the green today to close at 85.5 cents.

That marks a 22.14% jump in the past two days as uranium shares such as Paladin benefit from record-high uranium prices spurred on by a number of macro-undertones.

Uranium supply shock sends Paladin share price north

Uranium futures rallied hard in late February from a four-month low of US$44 per pound stretching up to US$54 per pound at the time of writing.

That’s a 10-year high for the chemical element that supplies energy for hundreds of thousands of individuals and companies around the world.

European conflict has sent uranium prices in the elevator as Russia responded to US-imposed sanctions on oil imports by placing a ban on exports of raw materials overnight, according to Trading Economics.

Some experts even believe uranium could reach US$100 a pound, as Russia accounts for roughly 10% of global exports for the metal.

The supply shock has market pundits nervous and has countries that use uranium for energy scrambling to try and find other means of energy production to make up the shortfall.

“The US nuclear energy sector produces 20% of the country’s electricity, and relies on Russia for 16% of its imports,” according to Trading Economics.

As Paladin’s share price closely traces the path of uranium with just a minor tracking error (shown below), investors were sure to be piling into the company today.

What else is weighing in?

Additionally, skyrocketing commodity markets could be impacting the Paladin share price today.

“…Skyrocketing oil prices prompted nations to shift to alternative energy sources,” Trading Economics also said, suggesting the jump is impacting demand–supply curves.

As a result of tension being wound at both ends, uranium futures have climbed more than 95% in the past year and are up 24% in the past month after staying on trend today.

In fact, the Bloomberg Commodities Index (BCOM), a proxy to gauge the strength of the overall sector, has soared to 10-year highs as well just recently.

It remains to be seen what will happen with the flow of various commodities from this trade battle. Regardless, uranium players like Paladin are on the receiving end of some serious capital gains.

The Paladin share price has spiked hard this week and is now up 110% for the past year. However, it is down almost 3% this year to date.

The post Why has the uranium rally got this ASX share blasting 22% higher in 2 days? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• These 3 ASX 200 shares are topping the volume charts on Thursday
• Why are ASX uranium shares having such a stellar day?
• Why Block, Myer, Paladin Energy, and Qantas shares are storming higher
• 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 Bruce Jackson.

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Shares in Volpara Health Technologies Ltd (ASX: VHT) finished trading on Thursday up 4.51% in the green at 70 cents.

Investors appeared to be reacting positively to a company announcement from Volpara today. Even though the release wasn’t price-sensitive in any way, it did cover some interesting progress with respect to the company’s VolparaDensity software.

Not only that, but brokers are constructive on the company this year, noting it has potential for outsized returns, Let’s take a look.

Is Volpara a buy in 2022?

According to the analysts at Bell Potter, Volpara could be a speculative buy this year. The broker recently retained its buy rating whilst slicing its price target to $1.30 per share.

Bell Potter reckons there is a disconnect between Volpara’s share price, that’s been stuck in a downward trend, and the company’s fundamentals, which have been growing.

The dislocation has its analysts excited, noting there is a potential buying opportunity before the market recognises the gap.

“Volpara has an expanding revenue base and appears to be on a pathway to cash flow breakeven over the course of calendar years 2022/2023”, it said.

“We conclude that the company is well funded in the short term and will continue to expand its revenue footprint both from existing clients and newly business opportunities”.

Morgans is also constructive on the company, valuing it at $1.87 per share back in January.

A figure of $1.58 arises after taking the average of these two valuations.

What did Volpara announce today?

Today Volpara announced the release of new screening recommendations by the European Society of Breast Imaging (EUSOBI) regarding the company’s software.

The EUSOBI made the recommendations for women with extremely dense breast tissue as a direct result of
findings from a 10-year long trial, that used VolparaDensity breast density assessment software.

“The new recommendations represent a significant shift from the biannual mammography exams currently advocated by most European screening organisations and offer further clinical and commercial validation of Volpara’s technology, designed to improve women’s health outcomes through personalised mammographic care”.

Micro-simulations that were modelled from the study’s findings suggest that “adding biannual MRI to biannual
mammography” – as was done in the trial – “would save 8.6 additional lives per 1,000 women invited, at a cost of 150,000 Euro per life, or 22,500 Euro per quality-adjusted life-year (QALY), indicating a cost-effective method”.

With these kinds of results, it doesn’t come as a surprise to why investors might have looked favourably on the company today, despite the announcement being deemed non-sensitive.

Those wanting to see the full version of the EUSOBI’s recommendations can do so by clicking here.

Volpara share price snapshot

The Volpara share price has been beaten down the last 12 months. During that time it has collapsed more than 43% and is down 33% this year to date.

During the past month, shares have continued the downtrend and traded 16%.

This kind of downbeat market sentiment is exactly what has brokers chomping at the bit on Volpara, as mentioned above.

The post Down 33% in 2022, is this ASX healthcare share a buy following the company’s latest trial result? appeared first on The Motley Fool Australia.

More reading

• 4 ASX healthcare shares at 52-week lows
• Down over 30% in 2022: 2 compelling ASX tech shares
• 2 ASX shares every growth investor needs to know about

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

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If you received your paycheque in crypto, it would be worth a good bit more today than it was yesterday. Though a good bit less than it was worth at the beginning of the year.

The Bitcoin (CRYPTO: BTC) price, still down 14% year-to-date, leapt 8% overnight.

Ethereum (CRYPTO: ETH) surged higher too, gaining more than 5%.

Now it’s unlikely that you’re currently getting paid in Bitcoin or Ethereum.

But a new survey from global online market research firm Dynata reveals a surprising number of Aussies are very interested in receiving their paycheque in crypto rather than the Australian dollar.

21% of Aussie respondents have already invested in crypto

The survey results released by Dynata this week are part of the company’s Global Consumer Trends Report, The New Experience Economy.

Dynata collected a total of 11,000 responses between 4 and 10 February, spanning 11 countries.

Sticking to the Australian results, the survey indicates that 21% of Australians have already invested in Bitcoin or another digital token. That number skyrockets when we narrow it down to Millennial men, with 59% saying they’d invested in crypto.

Those figures drop to 28% for Gen X males. And women remain underrepresented, with only 12% of Gen X females having invested in digital assets.

True adoption

According to Dynata, “Many analysts consider that true adoption will be when people chose to get their salary in crypto as opposed to their own country’s fiat currency.”

And the survey results show we may be well underway to that point. At least among Aussie Millennial men.

Asked whether they were “extremely” or “very interested” in receiving their paycheque in crypto, 39% said they were.

While only limited numbers of Aussie retailers currently accept digital tokens, 13% of Australian respondents reported they’ve used crypto to make purchases. Not surprisingly, that figure comes in significantly higher, at 26%, for Millennial men.

The post Fancy getting your paycheque in crypto? You’re not alone appeared first on The Motley Fool Australia.

More reading

• The Bitcoin price is rocketing 8% today. What’s going on?
• Will soaring commodity prices hold back the Bitcoin price in 2022?
• 52% of Aussies will never put money in this investment
• How might Visa and Mastercard’s Russia ban impact the Bitcoin price?
• Why Ethereum, Solana, and Cardano dropped today

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

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There is speculation swirling around what might be the next move for tech billionaire Mike Cannon-Brookes, and whether it could involve Origin Energy Ltd (ASX: ORG) shares.

Yesterday, the $10 billion energy giant published a strategy refresh which puts an acceleration in renewables at the front of its plans.

Its ambitions of leading the net-zero transition turned up only two days after an $8.25 per share bid for AGL Energy Ltd (ASX: AGL) from a consortium led by Cannon-Brookes’ private investment was turned down.

Now, another door might be open for Cannon-Brookes to steer Australia towards decarbonisation.

Could Cannon-Brookes provide the financial fodder?

While Origin Energy has proposed a more swift exit from coal-fired power than AGL, it still might have a reason for the Atlassian (NASDAQ: TEAM) co-founder to get involved.

As previously announced, Origin wants to bring forward the closure of Eraring power station to August 2025. Meanwhile, AGL’s less ambitious deadline of 2035 provided ample motivation for Cannon-Brookes to take action.

Ultimately, the $20 billion set aside by the billionaire and Canadian investment firm Brookfield to transition AGL away from coal is now dead in the water. However, the capital might be able to find a different home.

As outlined, ASX-listed Origin Energy plans to develop multi gigawatts worth of renewable assets this decade. In addition, it is open to partnering with third-party capital to bring these objectives into the real world. Origin Energy shares lifted on Wednesday on the news.

Origin chief financial officer Lawrie Tremaine was asked whether the company would take a $10 billion to $20 billion investment. In response, Tremaine said:

[…] an ambition that has some scale attached to it. And so would we partner with one party across a range of opportunities? Yes, we would consider that for sure.

Similarly, Origin CEO Frank Calabria shared in openness towards third-party funding, stating:

If there was a large source of funds that wanted to go on that journey with Origin, we would certainly be open to that and that may be the appropriate way to execute that strategy by the introduction of one partner that could go on that journey to all the development of those renewables.

How have Origin Energy shares performed?

Since the beginning of the year, the Origin Energy share price has moved upwards, rising 8.2%. For context, the S&P/ASX 200 Utilities Index (ASX: XUJ) is up 3.7%, suggesting it is performing better than its peers.

However, the AGL share price is outperforming Origin, with multiple takeover bids supporting its valuation. Cannon-Brookes has said the latest offer was the last from him.

The post Could Origin Energy (ASX:ORG) shares be next on the investment agenda for Mike Cannon-Brookes? appeared first on The Motley Fool Australia.

More reading

• Soul Patts urges AGL (ASX:AGL) board to give ‘more thought’ to takeover bid
• ASX 200 (ASX:XJO) midday update: Origin’s $250m buyback, Nickel Mines smashed
• Origin (ASX:ORG) share price higher on $250m buyback and refreshed strategy
• ASX 200 (ASX:XJO) midday update: AGL rejects new takeover offer, Appen makes strategic investment
• AGL (ASX:AGL) share price on watch amid improved takeover offer

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

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Today, the S&P/ASX 200 Index (ASX: XJO) caught the wave of optimism that flowed on from a stellar showing on US markets last night. At the end of the session, the benchmark index finished 1.1% higher at 7,130.8 points.

The biggest contributors to the positive day were tech and financial shares. This mirrored the landscape of US shares last night, which saw the Nasdaq gain 3.6% by the closing bell. Meanwhile, miners and energy companies cooled off as their respective commodity prices experienced a pullback from recent highs.

However, the question is: which shares delivered the biggest returns to investors on the ASX today? Here are the top ten stocks that came through for investors:

Top 10 ASX shares countdown today

Looking at the top 200 listed companies, Paladin Energy Ltd (ASX: PDN) was the biggest gainer today. Shares in the uranium producer rallied another 11.04% on top of strong performance yesterday. The extended stretch upwards follows talks in the US on potentially sanctioning Russian uranium supply. Find out more about Paladin Energy here.

The next biggest gaining ASX share today was GQG Partners Inc (ASX: GQG). Interestingly, the global boutique asset management firm jumped 6.96% without any new information hitting the trading floors. Uncover the latest GQG Partners details here.

Today’s top 10 biggest gains were made in these ASX shares:

ASX-listed company	Share price	Price change
Paladin Energy Ltd (ASX: PDN)	$0.855	11.04%
GQG Partners Inc (ASX: GQG)	$1.23	6.96%
Flight Centre Travel Group Ltd (ASX: FLT)	$18.87	6.61%
Qantas Airways Ltd (ASX: QAN)	$4.93	5.79%
Eagers Automotive Ltd (ASX: APE)	$12.75	5.11%
Corporate Travel Management Ltd (ASX: CTD)	$22.22	5.11%
Premier Investments Ltd (ASX: PMV)	$27.56	4.99%
Pinnacle Investment Management Group Ltd (ASX: PNI)	$9.99	4.83%
James Hardie Industries Plc (ASX: JHX)	$44.45	4.61%
Zip Co Ltd (ASX: Z1P)	$1.705	4.60%

Our top 10 ASX shares today countdown is a recurring end-of-day summary to ensure you know which companies were making big moves on the day. Check-in at Fool.com.au after the market has closed during weekdays to see which stocks make the countdown.

The post Here are the top 10 ASX shares today appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares are topping the volume charts on Thursday
• Why are ASX uranium shares having such a stellar day?
• Why Block, Myer, Paladin Energy, and Qantas shares are storming higher
• ASX 200 (ASX:XJO) midday update: Rio Tinto goes ex-div, tech and travel shares rebound
• Warning: Only 4 ASX shares just added to ASX 300 are profitable

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended PINNACLE FPO and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended PINNACLE FPO. The Motley Fool Australia has recommended Corporate Travel Management Limited, Flight Centre Travel Group Limited, and Premier Investments Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Santos Ltd (ASX: STO) share price descended today in line with a drop in the broader energy index.

Santos shares fell by 2.44% to close at $7.59. For perspective, the S&P/ASX 200 Energy Index (ASX: XEJ) tumbled 2.48%.

Let’s take a look at what might have impacted Santos today.

Oil prices

The fall in the Santos share price followed a plunge in oil prices in overseas markets on Wednesday. This came after the United Arab Emirates expressed support for increasing production, the BBC reported.

Brent crude dropped 13.2% to $111.14 a barrel, the biggest fall since 21 April 2020. This followed weeks of soaring prices as a result of supply disruptions due to Russia’s invasion of Ukraine. However, Brent crude is now recovering and is up 3.5% to $115.03 per barrel, Bloomberg figures reveal.

The Woodside Petroleum Limited (ASX: WPL) share price also closed down 4.67% today.

Santos CEO shares views on energy market

Santos CEO Kevin Gallagher expressed concerns about energy prices in the future. Speaking at the Financial Review Business Summit, he said:

Unless there’s a change in government policies globally – particularly if we go down the route of sanctions on Russian oil – I just don’t see how the supply side can fill the gap in a meaningful time frame to address these high prices.

That feels to me like unless there’s another massive slowdown as a consequence of a massive recession or another pandemic we could be stuck with very high prices, unhealthily high prices, for some period of time.

Further commenting on the energy outlook, Gallagher warned pulling the plug on fossil fuels “is not going to speed up the transition” (to clean energy) and could smash the manufacturing industry. He said:

That wouldn’t be so much of a transition but a demolition of that sector. There’s got to be multiple decades to transition.

Analysts at Morgans have recently placed a $9 price target on Santos shares. That’s 18% more than the current Santos share price. The broker likes Santos due to its diversified earnings base and growth profile.

As my Foolish colleague Brooke reported, Firetrail Investments portfolio manager Blake Henricks also recently recommended buying Santos shares. He said the company was “inflation-protected” with huge cash flows.

Santos share price snapshot

The Santos share price has climbed 7% over the past year. In 2022, it is up 21%. In the past month, Santos shares have gained almost 2%, while they have dropped 1% in a week.

Santos has a market capitalisation of about $25.8 billion based on its current share price.

The post Santos (ASX:STO) share price slips but CEO warns ‘very high’ oil prices could be here to stay appeared first on The Motley Fool Australia.

More reading

• Why are ASX 200 oil shares taking such a beating today?
• 5 things to watch on the ASX 200 on Thursday
• Beach (ASX:BPT) share price up: Oil prices predicted to stay higher for longer
• 3 more of Morgans’ best ASX share ideas for March
• 5 things to watch on the ASX 200 on Wednesday

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

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Bannerman Energy Ltd (ASX: BMN) is not a name you hear very much, but you might be interested to know that this ASX share has skyrocketed 31% so far this month.

So why would this company, now with a market capitalisation of $338 million, be popping up on the radar of some ASX investors?

The only relevant official announcement this month is that it will join the All Ordinaries Index (ASX: XAO). This means it is now one of the top 500 companies on the ASX.

That can have a minor impact on ASX share prices, as any inclusion in an index forces passive funds to buy those shares.

But that alone is unlikely to be worth a 31% hike in the stock price since the closing bell on 28 February.

What does Bannerman make, exactly?

The more likely reason lies in the commodity that Bannerman produces.

The company’s main business is in Namibia, where it is developing a mine that is forecast to start producing uranium in 2025.

“Our flagship Etango Project is one of the world’s largest undeveloped uranium assets,” reads the company website.

“It is located in the highly established uranium mining jurisdiction of Namibia and we have environmental permits in place for development.”

We have all heard many times since the war in Ukraine broke out that energy prices and ASX energy shares would head upwards.

Russia is an oil and gas exporter but it faces trade sanctions that will prevent its supply from going out to its usual clients.

Continental Europe is especially reliant on Russian energy. But after the recent invasion of Ukraine, Europe will seek to diversify its sources.

One alternative could be nuclear energy, which France already utilises extensively, and which Germany formerly used. 

Uranium could be a valuable fuel in coming years

All this means uranium will get caught up as a fuel commodity in any global energy price surge.

And perhaps this month investors have started noticing Bannerman’s potential as a future producer.

Bannerman Energy shares finished the session on Thursday at 27.5 cents, up 5.77% for the day.

The post Why has this ASX share you’ve never heard of soared 30% already this month? appeared first on The Motley Fool Australia.

More reading

• What a Boss! Why the Boss Energy (ASX:BOE) share price is soaring 13% today
• Why did the Race Oncology (ASX:RAC) share price drop 10% today?
• Black gold! 3 ASX energy shares pumping new 52-week highs today
• Ups and downs: Why is the Cettire share price leaping 10% today?
• The Cettire (ASX:CTT) share price is plunging 14% today. What’s going on?

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

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The Nickel Mines Ltd (ASX: NIC) share price is faltering once again today and is now deep in the red at $1.20.

That’s a further 15% decline today, which means its shares are now down by 25% since last Friday’s close. That comes despite the spot price of nickel soaring almost 145% in the past five days (shown below).

What on earth is going on?

Sanctions on Russian exports has commodity traders in a scurry trying to evaluate their next moves and position themselves for the volatility.

Russia is the world’s largest exporter of nickel, an industrial metal that had seen its value surge due to heightened demand for lithium-ion batteries. Nickel is a key component in the cathode of these batteries, and is thus essential for electric vehicle production, but is also used in stainless steel production.

Nickel futures soared to US$100,000 per tonne this week amid the nerves prompting the London Metals Exchange (LME) to suspend trading to avoid an all-out disaster, as fears of supply shock radiate throughout markets.

However, market data soon emerged showing that Chinese nickel and steel giant Tsingshan and its subsidiary, Shanghai Decent, may have been largely behind the upswing.

As The Motley Fool reported yesterday: “Tsingshan and the affiliate were recently caught out holding an enormous short position on nickel futures which has obviously backfired spectacularly in the last few days.

“There are reports that coverage of this short position is what may have helped propel nickel so high.”

Basically, the commodity group was forced to play its hand in order to avoid a huge margin call and from becoming insolvent, as the 200,000 tonne short position on nickel, printed at US$21,000/tonne, spectacularly backfired.

Large commodity producers will hedge their exposure to the product using futures to protect against large swings in prices.

Going short on nickel futures meant Tsingshan was trying to protect its inventory value by ‘locking in’ a price in which the company could sell its product at a future date.

The scenario is, if nickel prices plummeted too far below US$21,000/tonne, Tsingshan and Shanghai Direct could still sell their product above the market price – at US$21,000, to be exact.

However, with the unprecedented “black swan” event via conflict in Europe, the simple mechanics of supply and demand shot prices north, meaning Tsingshan and co were left out in the rain, so to speak.

The result was a snowball effect from complex derivatives positions that ultimately shored up huge losses for the firm, propelling nickel spot to triple in value on Wednesday.

At the close of trade, the mark-to-market accounting that exchanges use in daily settlements showed the company was up for more than US$7 billion.

Why is the Nickel Mines share price struggling?

Even before the unfathomed spike, nickel futures had reached US$25,233/tonne, up 46% from US$17,232/tonne at the end of April 2021.

Now it is up more than 200% for the year and traders still have no idea what will happen with global inventories and the pull-through from failed deliveries.

One might think the huge jump in nickel prices would be a net positive for specialists involved with the metal. Not Nickel Mines though.

It has suffered huge losses on the day and was even forced to pause trading yesterday following the jitters.

The reason is because Shanghai Direct is the company’s biggest shareholder, with an 18% stake, and also partners with Nickel Mines on two of its nickel pig iron operations.

The company affirmed this in an announcement yesterday that tried to dampen investors’ reaction to any potential ripple effect.

Management assured investors all deal covenants remain in place and there should be no fallout from the events.

It doesn’t appear to have worked – investors are offloading shares at pace today such that trading volume is 300% above its four-week average in today’s session.

As the divergence between Nickel Mines’ share price and the price of Nickel continues to widen today (as shown below), could this be a potential value gap? Analysts at Bell Potter think so.

The broker noted the dislocation between fundamentals (nickel price) and the company’s current valuation – which is now trading at a significant discount – could be a buying opportunity in a note today.

The Nickel Mines share price has collapsed around 11% over the past 12 months. It is also down almost 16% this year to date and 17% over the past month.

The post Nickel Mines (ASX:NIC) share price tumbles again, down 25% this week appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares are topping the volume charts on Thursday
• Why Newcrest, Nickel Mines, Rio Tinto, and Woodside shares are dropping today
• ASX 200 (ASX:XJO) midday update: Rio Tinto goes ex-div, tech and travel shares rebound
• Is the Nickel Mines (ASX:NIC) share price chaos a buying opportunity?
• 5 things to watch on the ASX 200 on Thursday

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

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