Iron ore just topped US$160 a ton. So why is Fortescue stock price falling?
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the Fortescue Metals Group Ltd (ASX: FMG) the stock price does not rise as the price of iron rises.
Iron ore jumped another 1% overnight to hit US$160 a tonne.
However, Fortescue share price is down 0.1% at the time of writing, even though the S&P/ASX 200 Index (ASX:XJO) charges 0.6% more.
Fortescue shares closed yesterday at $21.70 and are currently trading at $21.69.
What is happening in the markets?
Iron ore is still far from its July 2021 high of US$218 per tonne. But the industrial metal has risen from the US$120 a tonne it was trading on Jan. 1 this year.
Part of the price rise is due to the growing likelihood that China, the world’s biggest importer of iron ore, looks set to get a boost from government spending meant to boost China’s economy.
Why is Fortescue stock price not reacting today?
So, with iron ore prices rising again, why is Fortescue’s stock price not reacting today?
Part of that response lies in the 26% gains Fortescue shares have posted since March 15, when iron ore traded at US$145 a tonne.
The other reason Fortescue stock price is lagging today is risky moves in global and local markets that see investors snapping up high-growth tech stocks.
Overnight in Australian time yesterday, the tech-heavy Nasdaq gained 1.9%.
Below today, Materials is the worst performing sector, with the S&P/ASX 200 Materials Index (ASX:XMJ) down 0.28%. When it comes to ASX technology stocks, the S&P/ASX All-Tech Index (ASX:XTX) is up 2.7% at the time of writing.
Long-term investors shouldn’t worry about the slight drop in Fortescue’s stock price today, however. If you had bought stocks five years ago, you would be sitting on 255% gains.