Why is the Liontown share price diving 5% on Friday?

Rede arrow on a stock market chart going down.Rede arrow on a stock market chart going down.

The Liontown Resources Limited (ASX: LTR) share price is powering down on Friday despite no announcements from the company.

At market open, shares in the lithium producer were trading around $1.62 before quickly heading south as the day went on.

Currently, the share price is fetching at $1.568 apiece, down 4.71%.

Let’s take a look at what could be driving the fall around the company’s share price.

What’s driving Liontown shares lower?

Investors are bidding down the Liontown share price as the market digests the latest rate hike by the US Fed Reserve.

This could potentially mean that Australia also will lift interest rates yet again in 2 weeks’ time.

The negative sentiment appears to be impacting the wider materials sector.

For context, the S&P/ASX 200 Materials Index (ASX: XMJ) is down by 1.01% today, and 3.81% for the week.

In addition, a large number of lithium shares are also in the red.

Allkem Ltd (ASX: AKE) and Sayona Mining Ltd (ASX: SYA) are both down 6%.

Earlier this week, Liontown provided an update to the ASX stating it further strengthened its board.

The inclusion of highly experienced lawyer Adrienne Parker will bring legal, commercial and business knowledge to Liontown.

Management has been busy progressing the development of the Kathleen Valley Lithium Project in Western Australia. First production is expected to be achieved sometime in Q2 2024.

Liontown shares fell 2.66% despite the positive news as concerns weighed in about a forced recession from the US central bank.

Liontown share price summary

Despite its recent falls, the Liontown share price is up 10% over the past 12 months.

When looking at year-to-date, however, the share is down 5%.

Based on today’s price, Liontown commands a market capitalisation of approximately $3.61 billion.

The post Why is the Liontown share price diving 5% on Friday? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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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