Why this sector is lifting the ASX 200 higher today

The resource sector is doing all the heavy lifting for the ASX 200 today.

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The S&P/ASX 200 Index (ASX: XJO) has rebounded strongly on Monday after a sharp selloff last Friday.

At the time of writing, the ASX 200 is 0.66% higher at 7,321.3.

Today’s rebound has been led by the resources sector with the S&P/ASX Materials (INDEXASX: XMJ) trading 2% higher.

By comparison, the next strongest performing sector is the S&P/ASX Financials (INDEXASX: XFJ) up 0.47%.

Resources sector driving ASX 200 gains

Iron ore majors leading the charge

ASX 200 iron ore heavyweights, BHP Group Ltd (ASX: BHP)Fortescue Metals Group Limited (ASX: FMG) and Rio Tinto Limited (ASX: RIO), are all rallying strongly this afternoon, up 3.01%, 2.64% and 1.63% respectively.

Elsewhere, Mineral Resources Ltd (ASX: MIN) and BlueScope Steel Ltd (ASX: BSL) are also pushing higher, up 3.04% and 3.17% respectively.

The broad rally across iron-related ASX 200 shares is likely supported by sky-high iron ore prices. The metal is currently fetching around US$215/tonne.

Lithium miners posting gains across the board

ASX lithium shares, Galaxy Resources Limited (ASX: GXY)Pilbara Minerals Ltd (ASX: PLS) and Orocobre Limited (ASX: ORE) are charging higher today, up 3.48%, 2.82% and 2.88% respectively.

Lithium prices have gone strength-to-strength in 2021, driven by a surge in demand.

According to Fastmarkets, lithium prices have remained firm in Asia, with “suppliers reportedly struggling to meet demand while consumers prioritised the security of materials”.

Europe and the United States also experienced supply tightness and firmer prices, with a supplier saying, “we are sold out on Q3 deliveries already … a lot of customers were keen to secure their volumes for the third quarter … Everything is very tight in Europe and prices are expected to increase”.

Gold shares eke out gains

ASX 200 gold mining shares have joined in on the resource rally, with heavyweights  Northern Star Resources Ltd (ASX: NST)Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Ltd (ASX: NCM) nudging 0.649%, 1.53% and 0.19% higher.

While gold miners, more broadly speaking, have underperformed the ASX 200 year-to-date, the yellow metal could be in for a rebound, according to Saxo Market’s head of commodity strategy Ole Hansen.

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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.

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