It's been a rather wild Tuesday session for ASX shares so far today. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) has taken a 0.16% dip after opening in the green this morning, leaving the index at around 8,410 points. But let's talk about what's going on with the Fortescue Ltd (ASX: FMG) share price and other ASX 200 mining shares.
Fortescue shares are comprehensively bucking the market today thus far. While the ASX 200 may be down 0.16%, Fortescue shares are currently enjoying a healthy 6.86% spike up to $10.58. That's after the iron ore miner closed at $19.25 a share yesterday afternoon.
It was even better for Fortescue stock earlier this morning. Just after market open, we saw the miner go as high as $20.75 a share, a gain worth 7.8% at the time.
It's not just Fortescue, though. Its mining peer, BHP Group Ltd (ASX: BHP), has gained 3.8% so far today and is up to $42.14 a share. Similarly, Rio Tinto Ltd (ASX: RIO) has added 4.6% and is up to $125.04 a share. Lithium miner Pilbara Minerals Ltd (ASX: PLS) has also been swept up in the momentum.
So what's going on here?
Why has the Fortescue share price surged 8% today?
With no direct news from Fortescue itself, it seems that the same catalyst that is boosting mining and energy shares today might also be responsible for the Fortescue share price's current rise.
As we covered earlier this morning, the Chinese government has just indicated that a major additional stimulus could be coming.
A meeting of China's top Party officials has reportedly resulted in a decision that monetary policy needs to be "moderately loose" in order to "forcibly lift consumption". This "more proactive approach" from the country's leadership implies that rate cuts for the Chinese economy could be on the cards next year, as well as other stimulatory measures.
Iron ore shares like Fortescue have had a horrid year in 2024 as the slowing Chinese economy took the wind out of the iron ore price. The industrial metal remains down by more than 30% year to date. Investors are clearly betting that this trend could reverse though, if China does indeed initiate a new round of stimulus.
This morning, my Fool colleague Bernd quoted Zhaopeng Xing, senior strategist at ANZ Group Holdings Ltd (ASX: ANZ), as stating this on today's news:
The wording in this Politburo meeting statement is unprecedented. The policy tone shows strong confidence against Trump's threats.
Trump's "threats" refers to the incoming US President's threats to impose heavy tariffs on Chinese imports into the United States.
This announcement from the Chinese government has also boosted Chinese stocks and seems to have lifted oil prices.
Let's see what comes out of China next year.
