Ths S&P/ASX 200 Index (ASX: XJO)'s recent run of good form looks like it is set to continue this week. So far this Monday, the ASX 200 has gained another 0.86%, putting it within reach of 7,400 points. But the BHP Group Ltd (ASX: BHP) share price had an even better morning.
The use of the past tense is deliberate. BHP shares soared upon market open this morning, climbing to the psychologically significant $50 mark for the first time in the miner's very long history:
It seems investors want to take this new high slowly though, with BHP only just touching the $50.00 mark, which is now the company's rather neat new all-time record high.
But the good times didn't end up rolling for long. At present, BHP shares have retreated from those highs and have slipped into red territory, with the miner now well under $50 at $49.54 a share.
So why did investors push BHP shares to a new record high today?
Image source: Getty Images
Why did the BHP share price hit a $50 new record high?
Well, it's probably due to a couple of factors. The first is the reopening of China. The Chinese Communist Party has spent the past few months pulling off a stunning about-face on its previous and strict 'zero-COVID' policies.
The country now seems to be embracing a new 'living with COVID' policy of opening up after years of strict lockdowns and shutdowns designed to stop the spread of COVID infections.
Investors are betting that a reopened China will see the country's economy boom. BHP is a major exporter to China. As such, this is probably partly behind the renewed optimism we have seen with BHP shares of late.
Secondly, the iron ore price itself has been on a tear lately. The base metal is currently comfortably back over US$120 a tonne after dipping as low as US$80 last year. Iron ore is BHP's largest source of revenue, so higher prices are obviously good news for the miner.
So it's likely that the new highs we have seen for the BHP share price today can be put down to a combination of these factors. No doubt BHP's investors will be delighted with what the ASX brought them today.
