The Arafura Resources Ltd (ASX: ARU) share price is rocketing north today despite no new announcements from the company.
At the time of writing, the rare earth developer's shares have shot up 10.34% to 32 cents apiece.
Why are Arafura shares picking up today?
Investors are bidding up the Arafura share price alongside a strong rebound across the S&P/ASX 200 Materials Index (ASX: XMJ).
After falling 10% in a week, the materials sector is gaining ground by 1.20% to 15,290 points today. This makes it the second best performing index across the ASX at the time of writing, behind the S&P/ASX 200 Energy Index (ASX: XEJ).
It also appears that investors may be taking advantage of last week's share price weakness in Arafura. The share nosedived 3.13% last Thursday and 6.45% on Friday.
Earlier this month, the S&P Dow Jones Indices announced its quarterly rebalance, adding Arafura shares to the S&P/ASX 300 Index (ASX: XKO).
The ASX 300 comprises 300 of the largest ASX companies based on market capitalisation.
Most fund managers are required to buy or sell shares within specific indexes such as the ASX 300. With this in mind, some investors like to take pre-emptive action by buying these shares before they become accessible to fund managers.
The changeover will take place on 19 September 2022.
Arafura share price summary
Despite tumbling in recent times, the Arafura share price is up 88% over the last 12 months.
The company's share price year-to-date has also fared considerably well in spite of the volatility, up 52%.
The company's share price reached an all-time high of 50 cents on 5 April, before moving in circles over the past 5 months.
Based on today's price, Arafura has a market cap of around $551 million.
