BHP (ASX: BHP) share price lifts as China fears abate…for now

Why shares in the Aussie iron ore giant are rebounding strongly

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The BHP Group Ltd (ASX: BHP) share price is climbing higher on Wednesday as fears around the Evergrande collapse have subsided for the time being.

Why the BHP share price is climbing on Wednesday

To understand why shares in the iron ore miner are climbing today, it pays to understand why they initially fell. BHP was one of many ASX shares under pressure on Monday and Tuesday. That was largely due to news of Chinese property developer, Evergrande’s, financial troubles emerging.

Investors were skittish earlier this week as fears of a knock-on impact sparked a broad sell-off on the ASX. The BHP share price fell 3.4% from Friday’s close to Tuesday afternoon as iron ore shares slid lower.

One of the reasons the iron ore miners were in focus was the potential knock on effect of an Evergrande collapse. Some noted a slowdown in the economy, including the construction sector, could weigh on iron ore demand.

However, those fears appear to have subsided somewhat for the moment. The broader S&P/ASX 200 Index (ASX: XJO) is up 0.7% today while the Aussie miners are performing strongly.

With the BHP share price up 2.7% at the time of writing, it looks like some investors are willing to buy up despite the uncertainty. It’s a similar story for the other Aussie miners on Wednesday afternoon.

The Fortescue Metals Group Limited (ASX: FMG) is up 4.7% on Wednesday while Rio Tinto Limited (ASX: RIO) shares are up 2.8% to $98.41 per share.

Foolish takeaway

The BHP share price is rebounding strongly on Wednesday as the Chinese economy fears appear to have subsided for now. Shares in many of the Aussie iron ore miners are climbing higher despite the looming situation surrounding Evergrande.

It’s welcome news for investors in these Aussie companies after two straight days of losses to start the week.

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Motley Fool contributor Ken Hall 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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