Why the Incannex share price leapt 13% on Monday?

Incannex shares finished Monday on a high note.

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Key points

  • Incannex shares accelerate 13% to 26 cents to close off the day's trade
  • The company's shares are being added to the S&P/ASX 300 Index as of 19 September
  • Despite today's gain, Incannex shares are down 58% in 2022

Shares in Incannex Healthcare Ltd (ASX: IHL) roared higher to close the market on Monday.

Incannex shares closed the day up 13.04% to 26 cents apiece.

In comparison, the All Ordinaries (ASX: XAO) finished the day up 0.26%.

Why are Incannex shares smoking out the ASX?

Investors bid up Incannex shares on Monday, despite the medicinal cannabis company not releasing any announcements to the market. However, the S&P Dow Jones Indices updated its quarterly rebalance late on Friday.

As a result, a number of shares were on the move today following their addition or removal from the S&P/ASX Indices.

Incannex shares will be added to the S&P/ASX 300 Index effective prior to the open of trading on 19 September.

The inclusion to the ASX 300 Index provides a much-welcomed boost for the company's shares.

This is because fund managers must abide by their investing mandate which permits them to only buy shares included in specific indices.

Each index comprises a number of companies that have the largest market capitalisation of that group.

Incannex share price summary

In March 2022, the Incannex share price rocketed to a multi-year high of 75.5 cents before treading downhill.

Fast-forward to August, and its shares hit a 52-week low of 18.5 cents.

This means that when looking at year to date, Incannex shares are down 58.4%.

Based on today's price, Incannex is worth approximately $350.42 million and has 1.52 billion shares outstanding.

Motley Fool contributor Aaron Teboneras 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 Scott Phillips.

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