After a strong start this morning, it looks like this Tuesday session may just turn out negatively for ASX shares. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) is down 0.4% to around 8,390 points after initially spiking into positive territory this morning. But let's talk about what's happening with the Liontown Resources Ltd (ASX: LTR) share price today.
Unlike the broader market, Liontown shares are on fire. The ASX lithium stock closed at 61 cents a share yesterday afternoon. But today, those same shares are currently trading for just over 63 cents apiece, up a healthy 3.3% at the time of writing. It was even better for Liontown stock earlier this morning. Just after market open, Liontown rose as high as 66 cents a share, a gain worth 8.2% at the time.
It's not just Liontown that seems to be enjoying investors' good graces this session. For one, Liontown's peers in the lithium space are also surging. Take the Pilbara Minerals Ltd (ASX: PLS) share price. It's up over 7% right now at $2.30 a share. Piedmont Lithium Inc (ASX: PLL) shares have bounced around 4%, while Sayona Mining Ltd (ASX: SYA) is up by a similar amount.
Why were Liontown shares up 8% this Tuesday?
Lithium miners aren't alone though. Most of the top ASX mining shares, including Fortescue Ltd (ASX: FMG) and BHP Group Ltd (ASX: BHP), are also enjoying some hefty rises today. As are some ASX energy shares like Woodside Energy Group Ltd (ASX: WDS).
It looks as though the same catalyst behind these gains is also lifting the Liontown share price. So why is the Liontown share price defying the broader market's gloom to push higher so decisively today?
Well, as we covered this morning, the Chinese government has just indicated that it is preparing some major economic stimulus for 2025. Chinese Communist Party officials have reportedly promised "more proactive" fiscal measures and "appropriately loose" monetary policy in 2025 in order to "forcefully lift" domestic consumption. This could mean lower interest rates and a devalued Chinese currency in 2025, which could, in turn, see a major boost in lithium demand.
China is a global leader in lithium production and processing and in down-chain lithium industries like electric vehicle manufacturing. If this stimulus boosts demand for Chinese electric vehicles, it could well boost demand for (and thus the price of) lithium itself. This would, of course, be a boon to the Liontown share price and other ASX lithium and mining shares.
It seems that this is what ASX investors are expecting today anyway, judging by the forceful reaction from the Liontown share price and others. Let's see if this optimism plays out as expected.
