Why is the Sayona Mining share price soaring 8% on Monday?

Sayona share are in fine form on Monday.

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Key points
  • Sayona shares leap 8.46% to 35.3 cents during early afternoon trade 
  • The S&P/ASX 200 Materials (ASX: XMJ) sector is outperforming the broader ASX to surge 2.22% today 
  • Sayona shares are set to be added to the S&P/ASX 200 Index on Monday 19 September  

The Sayona Mining Ltd (ASX: SYA) share price is continuing to race to incredible highs today.

At market open, the emerging lithium producer's shares leapt to an intraday high of 35.5 cents.

However, some profit taking has led the share to slightly retrace to 35.3 cents apiece, up 8.46%.

Nonetheless, this makes it one of the top gainers on the ASX today, behind shares in lithium peer, Global Lithium Resources Ltd (ASX: GL1).

Happy woman miner with her thumb up signalling Wyloo's commitment to back IGO's takeover of Western Areas nickel

Image source: Getty Images

Sayona shares accelerate

Despite the company not releasing any announcements to the market lately, investors are buying up the Sayona share price.

This comes as the S&P/ASX 200 Materials (ASX: XMJ) sector is outperforming the broader ASX to surge 2.22% today.

That makes it the hottest index at the moment, and investors aren't letting up on it.

In the past week alone, the materials sector is up 7.46%.

Another factor that is likely providing support is the upcoming quarterly rebalance of the S&P/ASX Indices.

Sayona is set to be added to the S&P/ASX 200 Index (ASX: XJO) on Monday 19 September.

In turn, this enables fund managers to buy Sayona shares 

Most fund managers are required to buy or sell shares within specific indexes such as the ASX 200.

With this in mind, investors usually like to take pre-emptive action in buying these shares before being accessible to fund managers.

Sayona Mining share price snapshot

Extreme volatility on the ASX impacted the Sayona share price during the middle of the year.

The share fell from an all-time high of 39 cents on 19 April to a low of 11.2 cents on 23 June, representing a fall of 70%.

However, as the market rebounded in the following months, Sayona shares are treading close to their record high.

So far in 2022, the share price is up 171%.

Sayona Mining presides a market capitalisation of roughly $2.93 billion.

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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