After spending the last two days heavily in the red, the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has found some support today and is trading 0.6% higher late in the session. While the gains have been widespread; one of the key contributors to the market's rise has been none other than BHP Billiton Limited (ASX: BHP).
Here are three reasons why the stock might be jumping today…
- BHP Billiton's key rival, Rio Tinto Limited (ASX: RIO), delivered its first quarter production report this morning, revealing a 9% increase in iron ore shipments and a 12% increase in production. Investors might be hopeful of a similar result from BHP Billiton, when it delivers its March operational report tomorrow (watch this space).
- Speaking of iron ore, the commodity extended its rally overnight, climbing another 1.3% to be trading at US$51.57, according to the Metal Bulletin. That compares to a recent low of under US$47 a tonne and some investors might be beginning to think this is the start of a big turnaround.
- A lower Australian dollar is also likely to be providing a confidence boost for investors. Given that BHP's commodities are mostly quoted in USD denomination, a weaker Australian dollar makes its products more competitive, resulting in a significant increase in earnings. While the dollar is still trading around US 77 cents, some economists believe it could fall below US 70 cents sometime before 2017.
Think BHP Billiton is your best bet for 2015? Think again…
