Demand for nuclear power pushed ASX 200 energy shares higher last week

Uranium shares powered higher amid a stronger uranium price and an $80B US investment in reactors.

A worker with a clipboard stands in front of a nuclear energy facility.

Image source: Getty Images

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Key points

  • ASX 200 energy shares outperformed other sectors with a 1.55% gain last week, contrasting with a 1.52% decline in the broader S&P/ASX 200 Index due to unexpectedly strong inflation data.
  • Uranium shares surged, driven by rising commodity prices and a major US investment in nuclear reactors, with Paladin Energy up 14.88% and Boss Energy up 19.16%.
  • Oil and gas shares saw varied results, with Woodside Energy up 1.64%, while ASX 200 coal shares benefited from China's commitment to coal, leading to gains in Yancoal, Whitehaven Coal, and New Hope Corporation shares.

ASX 200 energy shares outperformed the 10 other market sectors last week with a modest gain of 1.55%.

Meantime, the S&P/ASX 200 Index (ASX: XJO) lost 1.52% to finish the week at 8,881.9 points.

The market was rattled by hotter-than-expected inflation data last week, which has all but ruled out any further interest rate cuts this year.

The Australian Bureau of Statistics reported that the Consumer Price Index (CPI) rose 1.3% in the September quarter and 3.2% annually.

Just three of the 11 market sectors finished the week in the green.

Let's review.

Energy shares led the ASX sectors last week

ASX 200 uranium shares had a strong week as the commodity price rose on the back of tighter supply/demand and an $80 billion US investment in nuclear reactors.

Uranium futures rose beyond US$81 per tonne last week, testing the 15-month high of $83.5 per tonne reached in September.

Analysts at Trading Economics said the uranium price was rising on expectations of higher demand for nuclear power amid supply cuts.

The analysts said:

The US Presidential administration announced an $80 billion deal with Canadian Westinghouse Electric for the construction of nuclear reactors.

On the supply front, Canada's Cameco Corp cut its annual production guidance due to expansion delays in its McArthur mine in Saskatchewan, forecasting a 19% drop in mined output from the key source.

Also, the world's top producer NAC Kazatomprom JSC cut its output by 10% next year.

The ASX 200's largest uranium stock, Paladin Energy Ltd (ASX: PDN), ripped 14.88% to close at $9.65 per share.

The Deep Yellow Ltd (ASX: DYL) share price rose 6.85% to $1.80.

Boss Energy Ltd (ASX: BOE) shares rocketed 19.16% to finish the week at $1.99 apiece.

What about ASX 200 oil, gas, and coal shares?

Turning now to ASX 200 oil and gas shares, the Woodside Energy Group Ltd (ASX: WDS) share price lifted 1.64% to close at $24.80.

The Santos Ltd (ASX: STO) share price fell 0.94% to $6.31, while Beach Energy Ltd (ASX: BPT) shares dipped 0.8% to $1.24.

Ampol Ltd (ASX: ALD) shares slumped 1.95% to $30.70. Viva Energy Group Ltd (ASX: VEA) shares lost 0.81% to close at $1.84 apiece.

The Karoon Energy Ltd (ASX: KAR) share price fell 1.53% to $1.61.

ASX 200 coal shares put in a solid performance amid China indicating it would continue to rely on coal power over the coming decades.

The Yancoal Australia Ltd (ASX: YAL) share price rose 3.34% to close the week at $5.57.

Whitehaven Coal Ltd (ASX: WHC) shares lifted 3.15% to $7.20 apiece.

The New Hope Corporation Ltd (ASX: NHC) share price ascended 3.75% to finish at $4.15 on Friday.

ASX 200 market sector snapshot

Here's how the 11 market sectors stacked up last week, according to CommSec data.

Over the five trading days:

S&P/ASX 200 market sectorChange last week
Energy (ASX: XEJ)1.55%
Consumer Staples (ASX: XSJ)1.36%
Materials (ASX: XMJ)0.04%
Financials (ASX: XFJ)(0.03%)
Utilities (ASX: XUJ)(0.78%)
Communication (ASX: XTJ)(0.95%)
Industrials (ASX: XNJ)(1.47%)
A-REIT (ASX: XPJ)(3.55%)
Consumer Discretionary (ASX: XDJ)(4.81%)
Information Technology (ASX: XIJ)(5.41%)
Healthcare (ASX: XHJ)(8.32%)

Motley Fool contributor Bronwyn Allen 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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