The All Ordinaries Index (ASX: XAO) had a fairly dreadful day of red ink this Tuesday. By the end of the trading session, the All Ords had slipped by a nasty 1.66%, putting the index at 7,199.6 points. But that loss pales in comparison to the performance of the Arafura Rare Earths Ltd (ASX: ARU) share price.
Arafura Rare Earths shares had an absolute shocker today. The rare earths share started the session at 48 cents a share, but ended the trading day at just 44 cents a share, a fall worth a whopping 9.37%.
So what went so wrong with Arafura that might have caused this sharp share price fall?
Why did the Arafura share price tank 9% on Tuesday?
Well, it’s hard to say. It certainly wasn’t sparked by anything out of Arafura itself, seeing as the company hasn’t made any ASX announcements today.
We did see some falls with many of Arafura’s compatriots though. Its fellow rare earths producer Lynas Rare Earth Ltd (ASX: LYC) fell by close to 3%. And lithium shares like Pilbara Minerals Ltd (ASX: PLS) and Core Lithium Ltd (ASX: CXO) had fairly depressing days as well.
But none of these shares fell by almost 10%.
So perhaps my Fool colleague James’ recent theory of profit-taking is the most likely explanation here. Although Arafura had an awful day today, it has hardly put a dent in this company’s stellar run this year.
Even after today’s near-10% drop, the Arafura share price remains up an incredible 89% or so in 2022 thus far. The company is also up an even more impressive 141% over the past 12 months, including by 45% in the past six:
Thus, it’s possible that, with the broader market taking a bit of a hit this December, investors are getting nervous and pulling some of these profits off the table.
At the last Arafura share price, this ASX All Ords rare earths share has a market capitalisation of $953.54 million.
The post Why did the Arafura Rare Earths share price dive 9% on Tuesday? appeared first on The Motley Fool Australia.
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More reading
- Why Appen, Arafura, Aurizon, and Star shares are sinking today
- Why is the Arafura Rare Earths share price rocketing 13% today?
- Why Arafura, Block, Leo Lithium, and St Barbara shares are storming higher
- Why Arafura, Megaport, Nitro, and Sayona Mining shares are storming higher today
- It’s not all bad news for the ASX All Ords on Monday. Here are 3 big gainers
Motley Fool contributor Sebastian Bowen 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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