Oz uranium stocks jump after Australia commits to supply agreement with India

After Australia committed to exporting uranium to India on Thursday, the latest development in a busy week for Australian diplomacy, ASX-listed uranium stocks are enjoying an upward bounce.

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At the time of writing (1PM AEST) on Friday:

• Paladin Energy (PDN) up over +5% to $10.17/sh
• Boss Energy (BOE) up over +8% to $1.37/sh
• Deep Yellow (DYL) up over +9% to $1.47/sh
• Bannerman Energy (BMN) up over +6% to $3.53/sh

So how does the supply agreement with India translate into upside for these stocks? Well, thematically – which is to say not necessarily fundamentally.

As I’ve written for HotCopper many times before, uranium investors are a fickle bunch, and long-loyal bulls only have two brief periods in recent memory to recall when the price stayed above US$100/lb on futures markets.

At the time of writing, uranium futures are at US$85/lb where they’ve been for quite a while now, trading sideways through the entire U.S.-Iran war despite Strait of Hormuz concerns and everything else that followed.

So it’s definitely not a story of these stocks reacting to commodity price movements – they’re reacting to the news that Canberra and New Delhi have agreed to establish a type of uranium sharing agreement.

Of course, none of that defies the fact uranium projects are notoriously hard to get off the ground, and there were no commercial names tied to the diplomatic deal inked on Thursday, but that hasn’t stopped investors hungry for volatility, which has been counterintuitively lacking across much of the ASX this week.

It’s clear the news from Thursday is driving it: Look at this 5D chart for the four stocks named above, widely considered the ASX’s most legitimate uranium players.

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