Why the Vulcan Energy (ASX:VUL) share price is in the spotlight this week

This lithium developer's shares are on watch this week…

| More on:
industrial asx share price on watch represented by builder looking through magnifying glass

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Vulcan Energy Resources Ltd (ASX: VUL) share price has come into the spotlight again this week.

Not that it ever really lost the spotlight.

With the lithium developer's shares up 422% since the start of the year, it has been getting a lot of attention from investors.

Why is the Vulcan Energy share price in the spotlight this week?

The Vulcan Energy share price was given an additional boost this week when S&P Dow Jones Indices announced changes to the S&P/ASX Indices. These changes will be effective prior to the open of trading on 20 September and follow S&P Dow Jones Indices' quarterly review.

According to the release, the lithium developer's shares will be added to the S&P/ASX 300 Index (ASX: XKO) at the next rebalance.

It is one of 12 new additions to the index, along with fellow lithium explorer Liontown Resources Limited (ASX: LTR) and battery materials focused company Novonix Ltd (ASX: NVX).

Why is this good news for Vulcan Energy?

Being added to an index like the ASX 300 can be a big positive for a company's shares.

This is for two reasons. The first is that index funds or ETFs that track the index will have to purchase shares. This buy-side pressure could give the Vulcan Energy share price an additional boost in the coming days and weeks.

Another reason is that many fund managers have strict investment mandates. This means they can only buy shares from certain indices.

This means that any fund managers that were restricted from buying shares outside the ASX 300, will now be able to consider Vulcan shares.

Though, with the Vulcan share price up so much since the start of the year, they may well wait for a pullback before considering an investment.

Motley Fool contributor James Mickleboro 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 Bruce Jackson.

More on Resources Shares

Female miner smiling in front of mining vehicle.
Resources Shares

Pilbara Minerals share price is climbing higher today: here's why

Lithium shares have been hit by a continued decline in prices over the past year.

Read more »

A boy with a gold crown stands stoically looking straight ahead.
Resources Shares

Step aside Pilbara Minerals: This ASX 200 mining stock is eyeing the lithium throne

Changing the lithium landscape.

Read more »

An ASX investor in a business shirt and tie looks at his computer screen and scratches his head with one hand wondering if he should buy ASX shares yet
Blue Chip Shares

This popular ASX 200 blue-chip share has literally gone nowhere in 17 years

Even blue-chip shares can fall short.

Read more »

Two men in hard hats and high visibility jackets look together at a laptop screen at a mine site.
Resources Shares

Buying Rio Tinto and BHP shares? Here's how they're tracking following Trump's copper tariff bombshell

Rio Tinto and BHP have both significantly increased their exposure to copper just as Trump's new tariffs loom.

Read more »

A man wearing a hard hat and high visibility vest looks out over a vast plain.
Resources Shares

Did BHP, Rio Tinto, or Fortescue shares deliver the best returns in FY25?

Many Australians are invested in this mega mining trio. How were the returns in FY25?

Read more »

Woman looks amazed and shocked as she looks at her laptop.
Resources Shares

If I'd put $1k in this ASX mining stock 3 years ago, I'd now have $120,000

Not a bad return!

Read more »

A man wearing a hard hat and high visibility vest looks out over a vast plain.
Resources Shares

Can a new leadership team turn Mineral Resources around?

Down 50% in a year, is the Mineral Resources share price primed for recovery?

Read more »

Female miner in hard hat and safety vest on laptop with mining drill in background.
Resources Shares

Up 29% in a year, are Lynas shares still a good buy today?

A leading expert delivers his verdict on the outlook for Lynas shares.

Read more »