Why are these ASX 200 lithium shares tumbling today?

The share prices of two S&P/ASX 200 Index (ASX: XJO) lithium favourites, Allkem Ltd (ASX: AKE) and Liontown Resources Limited (ASX: LTR), are suffering today.

Interestingly, there’s been no news from the companies on Monday. However, they’re joined in the red by many of their ASX 200 lithium peers.

Here’s a closer look at how the pair is performing today:

• The Allkem share price is currently $10.10, 3.39% lower than its previous close
• The Liontown Resources share price is 99.8 cents right now, 2.21% lower than it was at the end of Friday’s session

For comparison, the ASX 200 is down 1.02%, while the S&P/ASX 200 Materials Index (ASX: XMJ) has slumped 2.34%.

What’s weighing on these ASX 200 lithium shares?

Shares in ASX 200 lithium stocks Allkem and Liontown Resources appear to have been caught up in lithium and materials’ about-face on Monday.

Firstly, the broader materials sector’s suffering is likely weighing on the stocks. The index housing plenty of mining giants is currently the ASX 200’s worst-performing index.

And among the worst performers in the materials sector today is fellow lithium favourite Lake Resources NL (ASX: LKE).

The stock is currently tumbling 4.86% as its short interest leaps to join some of the market’s most shorted shares.

Lake Resources’ short interest had increased nearly 5% over the last month to place it as the fifth most shorted ASX share in The Motley Fool’s latest short-selling update.  

A similar jump has been experienced by ASX 200 newbie Core Lithium Ltd (ASX: CXO) – 7.7% of the company’s stocks are in the hands of short-sellers, according to the most recent data.

And while neither Allkem nor Liontown Resources have seen their short interest increase, sentiment for lithium may have shifted alongside short seller’s interest in some lithium stocks.

Finally, today’s slip could be the result of continued volatility.

The share prices of Allkem and Liontown Resources lifted 5% and 7% respectively on Friday. That left them having gained 3.3% and 2% respectively last week.

Thus, today’s dip might be in response to their strong performances last week.

The post Why are these ASX 200 lithium shares tumbling today? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Monday
• Why are Lake Resources shares becoming a short seller target?
• Is this a good time to go digging for ASX 200 mining shares for FY23?
• These are the 10 most shorted ASX shares
• ASX battery metals shares trying to power up after a horror June

Motley Fool contributor Brooke Cooper 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 Scott Phillips.

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