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Most ASX energy shares are down on Friday with the S&P/ASX 200 Energy Index (ASX: XEJ) the worst-performing sector, slumping 1.4%.

The rest of the market isn’t having a great day either, with only healthcare shares and property shares in the green. The benchmark S&P/ASX 200 Index (ASX: XJO) is down 0.48%.

A poor trading session overnight for gas, oil and other energy commodities is likely weighing on ASX energy shares today.

On top of that, the Australian Energy Market Operator (AEMO) has issued a fresh warning about future gas supplies and the potential for shortfalls as early as next winter.

ASX energy shares lagging the market

Firstly, let’s review the state of play among the big energy stocks on Friday afternoon:

• Whitehaven Coal Ltd (ASX: WHC) shares are down 1.94%
• Santos Ltd (ASX: STO) shares are down 0.8%
• Woodside Energy Group Ltd (ASX: WDS) shares are down 1.83%
• New Hope Corporation Ltd (ASX: NHC) shares are down 2.2%
• Ampol Ltd (ASX: ALD) shares are down 1.21%
• Paladin Energy Ltd (ASX: PDN) shares are down 1.43%
• Boss Energy Ltd (ASX: BOE) shares are down 0.81%
• Deep Yellow Ltd (ASX: DYL) shares are up 0.36%

Overnight, UK gas prices fell 4.22% and TTF gas prices fell 4.83%.

Also overnight, coal dropped 0.5%, and US gasoline fell 0.02%.

Uranium fell 6.59% to US$85 per pound.

Oil prices are also trading lower today.

West Texas Crude (WTI) oil dropped 0.5% to US$80.55 per barrel. Brent crude oil is also down 0.5% and trading at US$85.22 per barrel at the time of writing.

New AEMO warning on east coast gas shortfall

In other energy news, AEMO released its 2024 Gas Statement of Opportunities (GSOO) report yesterday.

In it, AEMO forecasts a gap in gas supply for the southern states from 2028.

This is due to production from Bass Strait continuing to fall amid rising demand.

The report highlights the risk of peak-day shortfalls on some days under extreme winter conditions from as early as next year. There is also the potential for small seasonal supply gaps from 2026.

According to the GSOO:

The report signals that new investment is urgently needed if gas supply from 2028 is to keep up with demand from homes and businesses, and for gas-powered electricity generation.

AEMO CEO Daniel Westerman said:

Since the 2023 GSOO, a range of storage and pipeline projects have been completed, improving gas supplies to southern states that will help offset declining production from Bass Strait gas fields.

However, gas production is forecast to fall faster than demand in the south, driven by declining production from Bass Strait, which has historically supplied around two-thirds of southern Australia’s gas.

Westerman reiterated that gas-powered electricity generation will play a key role in the transition to a green energy future.

He said:

Flexible gas-powered electricity generation is an essential component of the energy mix into the future.

Gas, along with batteries and pumped hydro, will enable higher rates of renewables and support electricity reliability as Australia’s coal-fired power stations retire.

The post ASX energy shares losing charge amid fresh warnings of gas supply shortfalls appeared first on The Motley Fool Australia.

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More reading

• ‘We have reached a bottom’: 5 ASX uranium shares leaping higher this week
• Could this development out of China reignite ASX 200 coal shares?
• I’d spend $5k on these ASX 200 shares today to target a $13,080 passive income
• $2.1 million! Who are the highest paid ASX 200 directors?
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Bronwyn Allen has positions in Woodside Energy Group. 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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There will be plenty of dividends flowing into investors’ accounts next week, as well as a new round of ASX All Ords stocks going ex-dividend.

If you want to get in on the dividend action with any of these popular ASX All Ords stocks, you need to purchase them before the ‘ex-div’ date.

The ex-dividend date is the first day that a share trades without its next dividend payment attached.

The share price will typically go down on the ex-dividend date because the stock obviously loses a bit of value without the dividend attached. Plus, the company loses that amount of cash off its balance sheet.

So, it’s handy to be aware of the ex-dividend dates on your stocks ahead of time so you’re not surprised by the share price dip on the day.

Here are a bunch of popular ASX All Ords shares going ex-dividend next week, and their payouts:

ASX All Ords dividend shares trading ex-dividend next week

ASX All Ords share	Dividend payment	Ex-dividend date	Dividend payday
Lycopodium Ltd (ASX: LYL)	37 cents	25 March	4 April
NRW Holdings Ltd (ASX: NWH)	6.5 cents	25 March	11 April
Flight Centre Travel Group Ltd (ASX: FLT)	10 cents	26 March	17 April
Myer Holdings Ltd (ASX: MYR)	3 cents	27 March	16 May
Rural Funds Group (ASX: RFF)	2.9 cents	27 March	30 April
Dexus Convenience Retail REIT (ASX: DXC)	5.3 cents	27 March	16 May
Reece Ltd (ASX: REH)	8 cents	27 March	10 April
Dexus Industria REIT (ASX: DXI)	4.1 cents	27 March	16 May
Centuria Industrial REIT (ASX: CIP)	4 cents	27 March	30 April
Arena REIT (ASX: ARF)	4.3 cents	27 March	9 May
IPD Group Ltd (ASX: IPG)	4.6 cents	27 March	10 April
Waypoint REIT (ASX: WPR)	4.1 cents	27 March	10 May
Australian Clinical Labs Ltd (ASX: ACL)	3 cents	28 March	26 April

The post Popular ASX All Ords shares with ex-dividend dates next week appeared first on The Motley Fool Australia.

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More reading

• Want the latest quarterly dividend from Rural Funds? You’d better hurry
• Act fast if you want to receive the next Flight Centre dividend
• Here’s why analysts love these buy-rated ASX 200 growth shares
• Shares vs. property: Why cheaper homes and ASX small-cap shares are rising fastest in 2024
• My top 3 ASX shares to consider buying before April

Motley Fool contributor Bronwyn Allen has positions in Flight Centre Travel Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Ipd Group. The Motley Fool Australia has recommended Flight Centre Travel Group and Ipd Group. 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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It’s not shaping up to be a pleasant end to the trading week for Australian shares so far this Friday. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) has tanked by a chunky 0.51%, leaving the index at around 7,742 points.

But that doesn’t mean all Australian shares are losing steam today. So let’s check out three ASX shares that are defying the broader market to push higher.

Three Australian shares bucking the markets today

Block Inc (ASX: SQ2)

Block, the owner of Afterpay (which enabled this US-based tech share to join the ASX) is first up. Block shares are crushing the ASX, with the payments stock currently up 1.98% at $127.68 a share. There’s been no major ASX news out of this company today that might easily explain this move.

However, Block’s Australian shares are actually extensions of the company’s primary US stock. Last night, we saw Block Inc (NYSE: SQ) shares rocket 3.18% to finish up at US$84.05. This continues a trend we’ve seen for the past few months, with Block’s US stock now up almost 88% since September.

It’s likely that this rise on the New York Stock Exchange overnight is what is driving Block’s ASX shares higher today.

Goodman Group (ASX: GMG)

Our next stock is a bonafide Australian share – well, a real estate investment trust (REIT) to be precise. Goodman Group units are also crushing the ASX today, with the REIT up a solid 2% to $31.62 a unit.

There hasn’t been much in the way of news out from Goodman in recent days either. Saying that, this is also an investment that has been delivering returns for investors in spades over the past few weeks. Goodman units are up 10.8% over the past month alone, and up more than 46% over the past six months.

Investors were particularly delighted with the half-year earnings report Goodman put out last month. This included a revelation that the REIT has increased its operating profit by 29% year on year to $1.13 billion. Goodman units have been leaping higher ever since. This goodwill could be what is helping Goodman stave off the market’s bad mood today.

Virgin Money UK plc (ASX: VUK)

Most Australian bank shares are having an awful Friday. That includes Virgin Money’s old owner National Australia Bank Ltd (ASX: NAB). But not Virgin Money itself. This ASX bank share is currently enjoying a healthy 3.42% boost up to $4.08.

Virgin Money has been in the news rather regularly lately, thanks to a takeover offer from the UK-based Nationwide Building Society. As we covered at the time, Nationwide Building Society’s offer of 220 British pence per share for Virgin Money saw the bank jump almost 35% on the ASX.

This morning, Virgin Money released an announcement confirming this offer. This would value Virgin Money stock at approximately $4.25 in Australian dollars. So it’s perhaps no surprise to see this bank climb towards that figure today.

The post 3 Australian shares quietly crushing the ASX today appeared first on The Motley Fool Australia.

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More reading

• Why Block, Core Lithium, Fisher & Paykel Healthcare, and Virgin Money are rising today
• 5 things to watch on the ASX 200 on Friday
• Got $500? 2 top Australian shares to buy and hold
• Why Arafura Rare Earths, Core Lithium, Goodman, and Superloop shares are falling today
• Why bond yields are bruising ASX property shares on Monday

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block and Goodman Group. The Motley Fool Australia has positions in and has recommended Block. The Motley Fool Australia has recommended Goodman Group. 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 uranium shares are enjoying a strong run this week.

While that’s par for the course over the past calendar year, uranium stocks came under selling pressure in February and into early March amid a 20% plus fall in uranium prices in just six weeks.

Of course, that retrace came on the back of uranium hitting 16-year highs in February.

While still below those highs, the price was back to US$88.50 per pound yesterday, up from US$83.10 a week earlier. The radioactive metal averaged $66.60 per pound in 2023, according to Bloomberg.

As you’d expect, the past week’s price increase has rekindled investor interest in ASX uranium shares.

Here’s how these five leading companies have performed since the opening bell on Monday:

• Paladin Energy Ltd (ASX: PDN) shares are up 9.4%
• Bannerman Energy Ltd (ASX: BMN) shares are up 19.1%
• Deep Yellow Limited (ASX: DYL) shares are up 11.7%
• Boss Energy Ltd (ASX: BOE) shares are up 2.2%
• Alligator Energy Ltd (ASX: AGE) shares are up 5.8%

For some context, the All Ordinaries Index (ASX: XAO) is up 1.4% for the week at this same time.

And there could be more outsized gains ahead.

Rising demand and sticky supply

ASX uranium shares appear well placed, with global demand for uranium broadly forecast to outpace supply growth over the medium term.

According to Jonathan Hinze, president of UxC (quoted by Bloomberg), “We have reached a bottom. The fundamentals are still strong, with increased demand and supply that hasn’t fully responded.”

The fundamentals do indeed look strong.

In December, 22 nations at the COP28 climate conference – including Japan, the United States and France – said they would triple their nuclear power capacity by 2050. At the moment, India and China – the world’s most populous nations – are leading the world in constructing new nuclear power plants.

Addressing the outlook for uranium demand, and by connection ASX uranium shares, Treva Klingbiel, president TradeTech, said:

We have a number of geopolitical factors that have a really significant influence on buyer behaviour, even though fundamentally nothing has changed.

Buyers can use the spot to tell them the sentiment of the day but must look at the long-term market to see that it is marching steadily up; it hasn’t taken a hiccup at all.

How have ASX uranium shares performed over the full year?

The All Ords has delivered a bank deposit busting 11.3% in gains over the past 12 months. And that’s not including the dividends some of those stocks will have paid shareholders.

But some investors will have done much better.

Here’s how these five ASX uranium shares have performed over that same period:

• Paladin shares have gained 132.5%
• Bannerman shares have gained 166.9%
• Deep Yellow shares have gained 150.0%
• Boss Energy shares have gained 121.9%
• Alligator Energy shares have gained 83.3%

As always, if you’re looking at buying uranium stocks or any other ASX shares, be sure to do your own thorough research first.

If you’re not comfortable with that or feeling time-poor, simply reach out for some expert advice.

The post ‘We have reached a bottom’: 5 ASX uranium shares leaping higher this week appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• Top brokers name 3 ASX shares to buy today
• Why Core Lithium, Deep Yellow, Iperionx, and Tuas shares are racing higher today
• Why this ASX 300 uranium stock could rocket 45%

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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“Why are bank shares up so much lately?”

No, it’s not a rhetorical question… it’s one that was sent in by one of our readers.

And it’s a good one.

The answer, unfortunately, is much harder.

—–

But before that — we’re doing something very cool. We’re going to host a LIVE, in-person recording of our podcast, Motley Fool Money. It’s going to be on the Gold Coast on the evening of Wednesday, March 27.

If you’re in the area and you’d like to see us record the podcast, we’d love to see you there. Just click on this link for more information and to RSVP!

——

If you’re a regular consumer of financial media, you’ll know that the talking heads are often asked these sorts of “Why did X happen” questions.

And they answer them, confidently, looking straight down the barrel of the camera.

Now, if you’ve been a regular reader of my articles, you’ll know one of my favourite investing quotes comes from John Kenneth Galbraith:

“Pundits forecast not because they know, but because they are asked.”

If he were alive today, he might add a companion:

“Pundits confidently ascribe motivations to share price movements not because they know, but because they are asked.”

Which might sound unkind. After all, I’m often one of the aforementioned talking heads, and I’ve been asked those sorts of questions!

I try to make my answers equivocal. I usually start with some version of ‘We can’t be sure, but…’ or “No-one knows, however…’.

Truth be told, I’d be happier if I wasn’t asked, but that’s not up to me.

To be fair, sometimes the question has a very clear and direct answer.

“Why were shares in Company X up 20% today?”

Perhaps because they got a takeover offer. Maybe they released earnings.

They’re pretty clear and direct ’cause and effect’ situations.

Other times, less so.

It’s likely that a move in a commodity price impacts a miner’s share price, but not necessarily.

Sometimes a stockbroker might put out a widely circulated buy or sell recommendation, which might – or not – impact a share price.

And that’s at the individual company level.

What about the market itself?

That’s when things get to a whole new level of abstraction.

On any given day, there are dozens of potential reasons why the share market could move.

But here’s where it gets silly: sometimes it moves because of what traders think others will think – regardless of whether it actually matters!

As I said, silly.

Let me ask you: is that really a game you want to play? Is it something you think you can earn a market-beating return from doing?

Me? No, and no. “Speculating on speculators” is a whole level of abstraction, and a degree of difficulty I can do without!

The good news? You don’t have to play that game. In fact, you shouldn’t!

You can simply let speculators speculate, and go about the business of investing.

But – and this is vital – once you decide you’re not playing that game, you need to get good at ignoring it.

The marathon runner doesn’t worry about the competitor who’s trying to run the first 100m in less than 10 seconds – she knows she won’t win that particular sprint, but she also knows that’s not her goal.

She’s focused on the 42km after that.

Which, I think, is a nice analogy for investing.

Investors – the stock market equivalent of marathon runners – don’t worry about the short-term sprints.

We focus on the marathon itself.

“Am I doing the things that mean I’ll finish the race in good shape?” is the only question that matters.

Sometimes, you’ll feel like you’re falling behind, as others sprint past you. Maybe they get lucky. Maybe they happen to own a ‘hot stock’. Maybe they’re just in the right place at the right time… for now.

But then, as you run your own race, you’ll find yourself passing them, as they sit on the side of the road, exhausted, injured, and unable to finish.

That is not the way you want your investing life to go.

Here’s the other thing: you don’t need to “win” the investing race. There’s only one Warren Buffett. And, unfortunately, I’m not him. But I don’t need to be.

I need to do to things:

1. Actually finish the race, without flaming out in the process; and

2. Finish not on the podium, but just with a result that meets my goals.

Which brings me back to the original question.

I don’t know why bank shares are going up. I would imagine it reflects a mood that rates will come down sooner than expected, and that banks will suffer fewer mortgage defaults, as a result. And/or that as rates stagnate, then fall, bank dividends will look better, by comparison, for those looking for income.

Those are plausible reasons. They might even be accurate.

Or not.

There’s no way to know what the tens of thousands of Commonwealth Bank of Australia (ASX: CBA) shareholders are thinking, right now. Or what the hundreds who bought and sold CBA shares yesterday were thinking, then.

So, while we can speculate on the answer, I’m not sure the speculation is useful.

First, because it could be dead wrong, so it’s little more than a curiosity.

But second because even if we did know why, in hindsight, it wouldn’t help us get to our long-term goal.

As Warren Buffett put it:

“… like Cinderella at the ball, you must heed one warning or everything will turn into pumpkins and mice: Mr. Market is there to serve you, not to guide you. It is his pocketbook, not his wisdom, that you will find useful. If he shows up some day in a particularly foolish mood, you are free to either ignore him or to take advantage of him, but it will be disastrous if you fall under his influence.”

So, if you get offered a good price – either to buy or to sell – by all means, take it.

But otherwise, ignore share price fluctuations.

Here’s what I’d do, instead: Ask yourself whether the business you own is likely to deliver good results for shareholders over the next 5 – 10 years. And build your portfolio accordingly.

No, that’s not as exciting. And yes, you’ll have to embrace uncertainty. But that’s just investing.

And a helluva lot better — and likely far more profitable — than speculating!

Fool on!

The post Why are bank shares up so much? appeared first on The Motley Fool Australia.

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More reading

• Reddit stock soars 48% on debut! Will the ASX IPO market heat up again?
• Want the latest quarterly dividend from Rural Funds? You’d better hurry
• Is the worst of the selling now over for ASX iron ore shares?
• Why Arafura, Pentanet, Sigma, and Webjet shares are falling today
• Why Block, Core Lithium, Fisher & Paykel Healthcare, and Virgin Money are rising today

Motley Fool contributor Scott Phillips 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 Reddit Inc (NYSE: RDDT) stock price had an incredible start to life on the stock market, rising by 48%!

This social media platform allows users to discuss topics of almost anything you can think of such as TV shows, the news, jokes, sports, personal finance and ask-me-anything Q&As.   

It’s been a while since a large social media business listed on the stock market. The rising interest rate environment put a dampener on large initial public offerings (IPOs) in the US and Australia.

But, could Reddit’s stock success spur a new wave of listings?

Tapping into AI excitement

According to reporting by Reuters, Reddit recently signed a content licensing deal with Alphabet‘s Google worth around $60 million per year. Reddit is making its content available for Google to train its artificial intelligence models.

However, Reddit still makes most of its revenue from advertising, which is a competitive area.

While the IPO was priced at US$34 per share, it finished the day’s trading at $50.44, which was a rise of just over 48%.

The chief operations officer from Reddit, Jen Wong, said:

At the core we are a growth company. Achieving our mission means that we want to grow users and community.

While Reddit has a large social presence and is a core digital destination where lots of people spend time on the internet, its valuation is only several billion US dollars, compared to more than US$1 trillion for Meta Platforms. Reddit has a lot of work to do to make a sizeable profit.

Can this excite the local ASX IPO market?

Reddit doesn’t get as much visitation as Facebook, YouTube, Instagram, TikTok or a few others, but it’s still one of the most visited digital sites, reportedly just behind LinkedIn in terms of where US social media users go, according to Statista.

There are currently only five ASX IPO listings planned at the moment – they are all small, with raisings of between $5 million to $10 million planned.

However, we should also remember that Chemist Warehouse is planning a reverse listing via Sigma Healthcare Ltd (ASX: SIG).

I don’t have any inside information about which businesses are planning to list next, but I think Reddit’s success and the ongoing strength of the overall ASX share market are very positive for potential listings.

I’m not sure the ASX will be able to attract the likes of Canva, but the foundations are there for smaller businesses to want to take advantage of the desire of investors for growing businesses.

While I wouldn’t necessarily be interested in tiny, speculative, exploration ASX mining shares or small ASX biotech shares, there can be merit in looking at growing companies with smaller market capitalisations. They are earlier on in their growth journeys and could deliver stronger long-term returns.

Of course, there are lots of potential great growth opportunities already on the ASX.

The post Reddit stock soars 48% on debut! Will the ASX IPO market heat up again? appeared first on The Motley Fool Australia.

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More reading

• Why Arafura, Pentanet, Sigma, and Webjet shares are falling today
• Why Australian Strategic Metals, Evolution, Sigma, and Webjet shares are storming higher
• Chemist Warehouse merger target Sigma reports 149% FY24 profit jump
• Are you investing or gambling?

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet and Meta Platforms. The Motley Fool Australia has recommended Alphabet and Meta Platforms. 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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There aren’t too many income payers on the ASX that pay their investors quarterly dividends. In Australia, biannual payouts are the norm, with most investors having to wait six months in between paycheques. But not when it comes to the Rural Funds Group (ASX: RFF) dividend distribution.

This agricultural real estate investment trust (REIT) and farmland landlord is one of the few ASX dividend shares that funds quarterly shareholder payments. These aren’t insignificant either. Rural Funds units are currently trading on a dividend distribution yield of over 5%.

But if you wish to receive the latest quarterly dividend from Rural Funds, time is running out.

Rural Funds is scheduled to fork out its latest dividend distribution on 30 April next month. It will be a payment worth 2.93 cents per unit. That’s the same payment investors have received every quarter since September 2021 from Rural Funds.

Like most distributions from ASX REITs, this payment will be unfranked.

However, if you are keen to see this payment arrive in your bank account, and you don’t already own Rural Funds units, time is running out.

How to secure the latest dividend distribution from Rural Funds Group

That’s because Rural Funds is scheduled to trade ex-distribution next week on Wednesday, 27 March.

When an ASX share or REIT trades ex-dividend (or in this case, ex-distribution), it rules out new investors from receiving the payment in question. Put another way, if you own Rural Funds units before 27 March, you will receive this latest payout. But if you buy them on 27 March onwards, you’ll miss out this time.

So expect to see a bit of a drop in the Rural Fuds unit price next Wednesday when the markets open. This reflects the inherent loss of value from this dividend distribution.

Distribution-eligible unitholders have until 2 April to choose the optional dividend reinvestment plan (DRP) for Rural Funds. That’s if they wish to receive additional Rural Funds units in lieu of the traditional cash payment.

So now you know what you have to do if you wish to bag this latest payout from Rural Funds Group.

At the current Rural Funds unit price of $2.12, this ASX REIT is trading on a trailing dividend distribution yield of 5.53%.

The post Want the latest quarterly dividend from Rural Funds? You’d better hurry appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Rural Funds Group. 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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S&P/ASX 200 Index (ASX: XJO) iron ore shares have taken a beating in 2024.

Although that trend took a sharp turn for the better this week.

Shares in the big iron ore miners like BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO) and Fortescue Metals Group Ltd (ASX: FMG) have come under pressure amid a sharp retrace in the price of the steel-making metal.

Iron ore kicked off 2024 trading at around US$145 per tonne.

Last Friday, that same tonne was trading for just under US$100.

But an uptick in optimism over the outlook for China’s steel-making output on the back of economic data released over the weekend has helped drive the iron ore price higher this week. The industrial metal gained another 3.2% overnight to trade for US$109.15 per tonne.

As you’d expect, that’s also helped lift the ASX iron ore shares.

Here’s how the big three have performed so far this week:

• BHP shares are up 3.9%
• Fortescue shares are up 6.2%
• Rio Tinto shares are up 3.9%

This sees the S&P/ASX 300 Metals & Mining Index (ASX: XMM) up 3.4% so far this week, compared to the 1.3% gain posted by the ASX 200.

Still, ASX iron ore shares have some way to go before making up for their 2024 losses.

Year to date:

• BHP shares remain down 12.4%
• Fortescue shares remain down 14.8%
• Rio Tinto shares remain down 10.8%

Here’s why the worst of the selling could be over.

ASX iron ore shares eyeing Chinese demand

According to Australia and New Zealand Banking Group Ltd (ASX: ANZ) analysts Daniel Hynes and Soni Kumari (courtesy of The Australian Financial Review), markets have already priced in slumping steel demand from China’s weak property sector.

And steel demand from the world’s number two economy, and by connection ASX iron ore shares, looks like it will be supported by strong growth in other areas.

According to ANZ’s analysts:

Iron ore prices may be near a floor amid a reset in expectations around demand. Weak consumption from the property sector is being countered by robust demand from other sectors.

ANZ doesn’t forecast any miraculous rebound for China’s struggling property sector this year. The analysts said they don’t see a “near-term solution”, adding that “steel demand from its residential real estate is likely to fall further this year”.

But infrastructure investments, particularly in renewables, are likely to see increased steel demand, alongside a flagged boost in social housing investment.

ANZ also expects China’s car manufacturers, alongside the nation’s shipping and machinery sectors, to boost iron ore demand this year.

“Together, these areas of growth should lift China’s steel consumption by 0.5% in 2024,” the analysts said.

As for what prices the ASX 200 iron ore shares can expect for their core product for the remainder of 2024, the analysts said:

With a large portion of Chinese domestic supply produced at costs higher than US$100/tonne, we see the current price as a floor. Ultimately, we expect iron ore to trade in a US$90–110/t range for the remainder of the year.

The post Is the worst of the selling now over for ASX iron ore shares? appeared first on The Motley Fool Australia.

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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 S&P/ASX 200 Index (ASX: XJO) is out of form on Friday and on track to end the week in the red. In afternoon trade, the benchmark index is down 0.3% to 7,759.9 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Arafura Rare Earths Ltd (ASX: ARU)

The Arafura Rare Earths share price is down 2.5% to 20 cents. This may have been caused by a broker note out of Bell Potter this week. In response to a strong rebound this month, the broker has downgraded the rare earths developer’s shares to a speculative neutral rating with a 19 cents price target.

Pentanet Ltd (ASX: 5GG)

The Pentanet share price is down 5% to 7.8 cents. This has been driven by the telco raising funds via a placement. Pentanet has received binding commitments for a placement of shares to multiple international and domestic institutional and high-net worth investors. The company will raise $4.28 million at a discount of 7.2 cents per new share. These funds will be used to invest in Nvidia cloud servers and infrastructure, working capital for growth, and the costs of the placement.

Sigma Healthcare Ltd (ASX: SIG)

The Sigma Healthcare share price is down 1.5% to $1.21. This may have been driven by a broker note out of Morgans this morning. According to the note, the broker has downgraded the pharmacy chain operator and distributor’s shares to a hold rating with a $1.14 price target. It made the move on valuation grounds.

Webjet Ltd (ASX: WEB)

The Webjet share price is down over 1% to $8.59. This also appears to have been driven by a broker downgrade. According to a note out of Macquarie, its analysts have downgraded the online travel agent’s shares to a neutral rating with an $8.88 price target. As with Sigma, Macquarie made the move on valuation grounds.

The post Why Arafura, Pentanet, Sigma, and Webjet shares are falling today appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pentanet. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Nvidia. 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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Coles Group Ltd (ASX: COL) shares could be a great option for an investment portfolio this week.

That’s what analysts at Bell Potter think, which have recently named the supermarket giant on their Australian equities panel.

The broker highlights that its panel of favoured Australian equities offer attractive risk-adjusted returns over the long term. It then explains:

We consider the current macro-economic backdrop and investment environment, focusing on quality companies with proven track records, capable management and competitive advantages. We’ve examined our analysts’ buy-rated stocks and preferred high conviction calls, to identify our preferred stocks in a range of sectors.

Why are Coles shares on the list?

Bell Potter added Coles to its preferred stock panels in response to its half-year result from last month.

It notes that Coles reported EBIT of $1,064 million for the six months, which was ~5% ahead of its estimates and the analyst consensus.

In addition, it points out that management has multiple levers for profit improvement. These include its private label positioning attracting price conscious consumers, further reductions in theft rates through technology and operational improvements, growing Coles 360 media income, and productivity improvements from the Witron automated distribution centres.

It is for these reasons that the broker prefers Coles shares over rival Woolworths Group Ltd (ASX: WOW) and is forecasting earnings ~5% above consensus estimates in FY 2025.

Plenty of upside potential

Although Coles shares have rallied 6% since this time last month, Bell Potter sees scope for much bigger returns over the next 12 months.

The broker has put a buy rating and $19.00 price target on its shares. This implies potential upside of 15% for investors.

In addition, the broker is expecting a 4% dividend yield over the period, which lifts the total potential return to approximately 19%.

It concludes:

Costs are expected to remain elevated but should moderate through FY24 and FY25 as general inflation tapers off. In the medium term, 1) higher immigration should support grocery spending, and 2) Coles is entering a period of elevated capex intensity as it reinvests to modernise its supply chain and to catch up to competitors on online and digital offerings, which should help Coles maintain its market position.

The post Why Coles shares could be a best buy for blue chip investors appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles Group. 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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