Bargain-hunters are taking advantage of discounted iron ore miners on Friday.
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Buying activity is picking up for depressed ASX iron ore miners like the Fortescue Metals Limited (ASX: FMG) share price on Friday.
The S&P/ASX Materials (INDEXASX: XMJ) index is up 2.05% headlined by gains from iron ore majors.
The BHP Group Ltd (ASX: BHP) share price is up 3.55% to $37.94. The Rio Tinto Limited (ASX: RIO) share price is rallying 4.12% to $100.5. And the Fortescue share price is tailing behind, up 2.88% to $14.31.
What’s driving iron ore miners higher?
The S&P/ASX 200 Index (ASX: XJO) might be taking off after Wall Street, as all three of its major indices posted gains of around 1%.
Consumer discretionary and materials were among the best performing sectors overnight, rallying 1.5% and 1.35% respectively.
Likewise, what’s been a choppy week for the S&P/ASX 200 Index (ASX: XJO) is coming to a bright conclusion, rallying 0.74% to 7,310 at the time of writing.
In addition, Friday marks the end of China’s week-long National Day holiday.
Iron ore prices have remained relatively flat in light of China’s public holiday. Fastmarkets reported that iron ore prices edged 0.02% higher on Thursday to US$117.02 a tonne on the back of limited trading liquidity.
But China’s most-traded iron ore futures contracts for January 2022 delivery came back surging on Friday, up 4.8% to ~760 yuan (US$117) a tonne.
China also announced some encouraging economic data with its services sector growing in September according to CNBC.
The Caixin/Markit services purchasing managers’ index (PMI) rose to 53.4 from 46.7 in August, bouncing from the lowest level seen since the height of the pandemic last year. Any figure below the 50-point mark represents a contraction on a monthly basis.
An encouraging move for Chinese iron ore pricing and positive domestic economic data after a week long break is likely fueling buying activity from iron ore juniors through to majors like the BHP and Fortescue share price.
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Motley Fool contributor Kerry Sun 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.