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Highlights
- Over the last five years, the annualised return of the resource index was more than double, relative to the S&P/ASX 200.
- The index has gained significantly in the last one month due to a significant rise in crude oil prices.
- Various ASX-listed resource heavyweights including RIO, FMG, and BHP pushed the ASX Resource Index.
The S&P/ASX 200 Resources Index (AXJR) offered a YTD return of 12.38%, as of Friday. On Monday, the resource index that tracks the performance of major energy and metals & mining companies of Australia dipped 0.23% to exchange hands at 6,025.1.
Source: EODHD/Others Eikon
On comparing its performance with the S&P/ASX 200 index, it seems the resource index has outperformed the broader market. Over the last five years, the annualised return of the resource index was more than double, compared to the S&P/ASX 200.
Must Read: XEJ up 28% so far in 2022: What’s powering Australia’s energy index?
While looking at the short-term three-month candlestick chart, it looks like the index currently stands at a crucial point. The candles form the “three outside up” pattern at the encircled point, which is a bullish reversal signal. The index has gained significantly in the last one month due to a significant rally in crude oil. With ease in COVID-19 restrictions in China, demand for other commodities including iron ore & copper also surged, which helped lift stock prices of various ASX-listed resource players driving AXJR to hover near multi-week highs.
Good Read: Here’s how energy prices are driving Australian Energy Index
ASX Energy Stocks
Various ASX-listed resource heavyweights have pushed the ASX Resource Index. Mining giant Fortescue Metals Group’s (ASX:FMG) share price has surged a whopping 22.92% in the last six months. So far in 2022, the shares surged 7.81% with 7.75% gains coming in the last five days alone.
Another significant resource player, Rio Tinto (ASX:RIO), has also gained 16.13% in 2022. Though the shares dipped 0.22% on Monday, the miner has logged a weekly gain of 1.07% in line with a rise in iron ore and copper prices.
Also Read: Crude oil surges to 14-year highs on delays in Iranian talks
Apart from this, various other significant natural resource players, including Santos (ASX:STO), Woodside Petroleum (ASX:WPL), and South32 (ASX:S32), also logged significant gains in their share prices lately due to a rise in prices of various commodities.
Must Watch: As Russia-Ukraine War Intensifies, Commodities Also Soars
Bottom Line
In the last one year, Australia’s S&P/ASX 200 Resources Index has performed significantly better than the broader S&P/ASX 200 index in providing returns to market participants. Over the last five years, the annualised return of the resource index was more than double, relative to the S&P/ASX 200.
