Here’s why BHP Billiton Limited has soared today

After heavy declines in recent weeks, this could be the beginning of a strong recovery.

| More on:

Shares in BHP Billiton Limited (ASX: BHP) have exploded out of the gates today, trading 96c or 2.72% higher at $36.24 and propelling the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) 1.1% higher. It is the highest the stock has traded in over a week after sinking as low as $35.14 on Friday.

The slight recovery in iron ore price overnight would be one of the primary reasons behind the jump. The commodity rose 1.1% to once again be trading above US$90 per tonne which, although it is still more than 33% below its average 2013 price, may have given investors a glimmer of hope of a price recovery.

Other iron ore miners also reacted positively to the commodity’s jump with Rio Tinto Limited (ASX: RIO), Fortescue Metals Group Limited (ASX: FMG) and BC Iron Limited (ASX: BCI) up 2.2%, 3.9% and 2.7% respectively.

Fresh assurances from the Federal Reserve regarding the US recovery are also acting as a strong tailwind for the stock today. The Fed expressed confidence that the nation’s recovery was largely on track and that interest rates would remain low for a “considerable time.”

That’s good news for BHP Billiton’s Australian shareholders who can enjoy the miner’s generous 3.6% fully franked dividend yield in the meantime!

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

More on ⏸️ Investing