Category: Stock Market

Investors have lost over $100 billion in today’s market bloodbath and some ASX 200 retail shares could be worse for wear due to their direct exposure to waning consumer confidence.

The S&P/ASX 200 Index (ASX: XJO) slumped over 4% during lunchtime trade with every sector in the red.

Outlook for ASX 200 retail shares darken

Markets are spooked by a potential hard landing by the US economy. The bears are emboldened by speculation that the US Federal Reserve will make an oversized 0.75% interest rate hike at its next meet.

The aggressive rate hikes could send the world’s biggest economy into a recession. What’s more, the move will pressure our central bank to take more dramatic rate increases too.

Higher interest will add to households’ cost of living pain with the price of everything going up. This leaves consumer discretionary retailers to face the brunt of the market meltdown.

Downgrades leaves no bargain buys

To get a sense of how bad things could get for ASX 200 retail shares, Macquarie looked at what happened during the GFC as the broker downgraded its forecasts for the sector.

Macquarie said:

Our forecasts now reflect the experience of slowing revenue and EBIT margin pressure, as we experienced in 2009.

The economy is in a different position, with low unemployment, low interest rates and high cash balances and this may make the recession behave differently. But as a baseline, rising inflation and plummeting consumer confidence are likely to drag on discretionary retailers.

Hit by downgrades

The silver lining is that the broker thinks Australia will escape a recession, unlike the US. While our economy might not contract for two consecutive quarters (the official definition of a recession), Macquarie reckons inflation here will hit 7%.

Against this backdrop, the broker is urging investors to dump ASX 200 retail shares in the discretionary space for consumer staples shares.

Which ASX 200 retail shares to buy and sell

The broker downgraded the Wesfarmers Ltd (ASX: WES) share price and JB Hi-Fi Limited (ASX: JBH) share price to “underperform”.

It also cut its rating on the Harvey Norman Holdings Limited (ASX: HVN) share price to “neutral”. What saved Harvey Norman from a bigger downgrade was its lower relative valuation and more reasonable consensus estimates.

On the flipside, Macquarie is urging investors to buy into the more defensive ASX supermarket shares. These include the Coles Group Ltd (ASX: COL) share price and Metcash Limited (ASX: MTS) share price.

The post Why are these ASX 200 retail shares lagging the market today? appeared first on The Motley Fool Australia.

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More reading

• Why is the IAG share price smashing the ASX 200 today?
• Here are the 3 most traded ASX 200 shares on Tuesday
• Why BHP, Block, Harvey Norman, and PointsBet shares are sinking
• Is this a stock market crash for ASX 200 shares?
• ASX 200 bank shares tumble: Citi says time to buy

Motley Fool contributor Brendon Lau has positions in Macquarie Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Harvey Norman Holdings Ltd. The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET, Harvey Norman Holdings Ltd., and Wesfarmers Limited. The Motley Fool Australia has recommended Macquarie Group Limited. 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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The ResApp Health Ltd (ASX: RAP) share price is by far one of the best performers on the ASX today.

This comes as the company provided an update on its proposed acquisition by Pfizer Inc (NYSE: PFE), with trading resuming immediately after the announcement.

The global biopharmaceutical giant is proposing a takeover of ResApp via its wholly-owned subsidiary Pfizer Australia Holdings Pty Limited.

At the time of writing, the digital health company’s shares are up 50% to a new 52-week high of 17 cents.

In contrast, the All Ordinaries Index (ASX: XAO) is heavily down by 4.2% to 6,842 points.

What’s driving ResApp shares to a 52-week high?

ResApp’s voluntary suspension in trading was lifted immediately following the company’s latest release.

In its statement to the ASX, ResApp advised that Pfizer Australia has agreed to increase the scheme consideration.

Originally, Pfizer Australia offered to acquire 100% of ResApp’s issued capital for 11.5 cents per share in cash.

However, in a draft report provided to the ResApp board in late May, BDO Corporate Finance said the shares were worth between 14.6 cents and 27.7 cents, with a preferred value of 20.7 cents per share.

Given the initial proposal was substantially lower than the expert’s advice, Pfizer Australia revised its offer after negotiations with ResApp.

As such, Pfizer Australia matched the preferred value of 20.7 cents per ResApp share, totalling $180 million. This represents a 130% premium on the last closing ResApp share price of 9 cents on 8 April.

For the deal to proceed at the proposed offer, ResApp’s COVID-19 algorithm study must satisfy certain readout results. Currently, the COVID-19 cough-based detection tool is being trialled across United States study recruitment sites.

Should ResApp fail to meet the data confirmatory study results, Pfizer Australia’s scheme will be offered at 14.6 cents apiece.

Nonetheless, the ResApp board unanimously recommended that ResApp shareholders vote in favour of the revised scheme at the scheme meeting. This is expected to be held in early to mid-August.

The results of the ResApp confirmatory study and independent statistician review are due on or around 20 June.

Management commentary

ResApp CEO and managing director, Tony Keating said:

The ResApp Board is pleased to announce the renegotiated agreement with Pfizer which represents a material increase in the consideration to be received.

The Board believes this offer provides an attractive premium to the undisturbed ResApp share price, reduces the risk for shareholders by providing certainty through an all-cash offer, while also valuing the upside potential of these COVID-19 results.

ResApp share price snapshot

ResApp shares have surged by more than 240% over the past 12 months.

Year to date, the company’s shares are up by almost 160%.

ResApp presides a market capitalisation of roughly $94.51 million. It has approximately 859.2 million shares outstanding.

The post Here’s why the ResApp share price is rocketing 50% today appeared first on The Motley Fool Australia.

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More reading

• Why Australian Clinical Labs, Lake Resources, PolyNovo, and ResApp are rising
• ResApp share price halted ahead of Pfizer takeover update

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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It’s been a day of carnage for the S&P/ASX 200 Index (ASX: XJO) and most ASX 200 shares. As it currently goes, the ASX 200 is down by a shocking 4.14% and is back to just over 6,600 points. But while most ASX 200 shares have copped a commensurate beating alongside the ASX 200, that is most certainly not the case for the Insurance Australia Group Ltd (ASX: IAG) share price.

IAG shares are defying the market’s gloom today. This insurance company is actually in the green, up 0.12% so far today to $4.18 a share. Considering the ASX 200 is down by 4.14%, this means that the IAG share price is outperforming the market by more than 4% – a mean feat for any share at any time.

IAG started the day deep in the red, opening at just $4.02 a share after closing at $4.18 last week. But the company’s fortunes improved throughout the day to the point we see now.

So how are IAG shares managing to pull this comeback off?

How is the IAG share price bucking the ASX 200 today?

Well, we can’t be too certain. IAG hasn’t released any news or announcements directly today (or indeed this month yet).

But what we do know is that IAG shares have been attracting some significant love from some expert investors lately, which could be helping to save the company from the market’s falls today.

Last month, we covered how Michael Maughan of Tyndall Asset Management named insurance companies like IAG as some ASX shares which have significant pricing power, and thus are inherently well-placed to weather the effects of inflation. Here’s some of what Mr Maughan said on IAG:

This current inflationary environment has seen bond yields rise and expectations increase for significant cash rate rises. This means that the interest earnings on the premium float of insurers are rising and will add meaningfully to profits.

But Tyndall Asset Management isn’t the only ASX expert bullish on IAG right now. Last week, we also covered the views of David Cassidy, head of investment strategy at Wilsons. He singled out IAG as his pick of the ASX insurers. Here’s why:

IAG has traditionally been a high-quality insurer, although this has been tested over the past 2 years with COVID, bushfires and perils… We think IAG’s turnaround is on track, and this should lead to strong earnings growth over the next 12 months.

So perhaps investors are taking these kinds of views to heart today, and have chosen to flock to IAG shares in the face of such a brutal market downturn today.

Whatever the reasons for IAG’s strong showing this Tuesday, no doubt investors will be thanking their lucky stars.

At the current IAG share price, this ASX 200 insurance share has a market capitalisation of $10.3 billion, with a dividend yield of 3.17%.

The post Why is the IAG share price smashing the ASX 200 today? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most traded ASX 200 shares on Tuesday
• Is this a stock market crash for ASX 200 shares?
• ASX 200 bank shares tumble: Citi says time to buy
• ASX 200 midday update: Block and Zip crash amid market selloff
• ASX 200 slumps 5% following Wall Street sell-off

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 positions in and has recommended Insurance Australia Group Limited. 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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Despite most ASX companies being in the red today, the Polynovo Ltd (ASX: PNV) share price is rising.

During late afternoon trade, the medical device company’s shares are changing hands for $1.21, up 4.76%.

In comparison, the S&P/ASX 200 Index (ASX: XJO) is plummeting by 4.33% to 6,631 points.

Polynovo defies ASX market sell-off

Polynovo investors are shrugging off the wider market slump today.

The company hasn’t made any price-sensitive announcements since its third quarter trading update in early April.

However, insider buying action among senior Polynovo managers has likely propped up the share price and overall sentiment.

In particular, Polynovo chairperson David Williams made a series of purchases from the start of May totalling more than $5 million.

Not only did Williams take advantage of the share price weakness but he’s been averaging down his cost position.

In total, Williams now has more than 24.59 million Polynovo shares spread across a series of portfolios.

The number of buy-ins conducted tells us that Williams believes the company’s shares are trading at an attractive price. This seems to have resonated with investors, which could be why Polynovo is defying the ASX sell-off today.

It is worth nothing that at the start of May, Polynovo shares hit a 52-week low of 83.5 cents.

Polynovo share price summary

Since this time last year, the Polynovo share price has fallen by 56%.

Year-to-date it has fared better, but you’d still be looking at a loss of 25% if you invested at the start of 2022.

Based on today’s share price, Polynovo presides a market capitalisation of approximately $764.25 million.

The post Why is the Polynovo share price rising while other ASX 200 stocks are plummeting? appeared first on The Motley Fool Australia.

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More reading

• Why Australian Clinical Labs, Lake Resources, PolyNovo, and ResApp are rising
• These are the 10 most shorted ASX shares
• ASX 200 midday update: Magellan smashed, Liontown signs Tesla deal
• Appen and PolyNovo tumble after being kicked out of the ASX 200 along with these shares
• These are the 10 most shorted ASX shares

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 positions in and has recommended POLYNOVO FPO. 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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Oh, my stars. The S&P/ASX 200 Index (ASX: XJO) has had possibly the worst start to the trading week imaginable for ASX investors this Tuesday. Today has seen the ASX 200 cop an absolute belting. The index is currently down a painful 4.4% to well below 6,700 points. 

But rather than dwelling on that, let’s instead take a look at the shares that are currently topping the ASX 200’s volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Tuesday

Telstra Corporation Ltd (ASX: TLS)

ASX 200 telco Telstra is our first cab off the rank this Tuesday. So far today, a sizeable 20.01 million Telstra shares have been traded on the share market. There hasn’t been any news out of Telstra today.

Thus, we can probably say with conviction that this elevated volume is the result of the painful moves the Telstra share price has gone through so far. At present, the telco is down a nasty 2.24% to $3.72 a share. That’s a depressing move to be sure, but at least it’s outperforming the index.

Liontown Resources Limited (ASX: LTR)

Liontown is next up today. This ASX 200 lithium stock has had a hefty 23.45 million of its shares bought and sold on the markets thus far. Unfortunately, this move also seems to be a consequence of a nasty share price sell-off.

Even more unluckily for investors, Liontown shares have been smashed far harder than the broader market. This company has sold off by a meaningful 7.6% so far today and is now almost back to $1 a share. No wonder so many shares have traded today.

Pilbara Minerals Ltd (ASX: PLS)

Our third and final ASX 200 share today is another lithium stock in Pilbara Minerals. A whopping 39.13 million of this company’s shares have swapped hands as it currently stands. Unfortunately, this seems to be yet another byproduct of a dreadful share price movement.

Pilbara shares have been whacked today, although not quite to the same extent as Liontown. Pilbara has dropped 5.8% so far to $2.12 a share, although the company fell as low as $1.98 this morning.

The post Here are the 3 most traded ASX 200 shares on Tuesday appeared first on The Motley Fool Australia.

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More reading

• Why is the Pilbara Minerals share price down 6% on Tuesday?
• Is this a stock market crash for ASX 200 shares?
• ASX 200 bank shares tumble: Citi says time to buy
• ASX 200 midday update: Block and Zip crash amid market selloff
• ASX 200 slumps 5% following Wall Street sell-off

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. 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 positions in and has recommended Telstra Corporation Limited. 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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The S&P/ASX 200 Index (ASX: XJO) is having a day to forget. In afternoon trade, the benchmark index is off its lows but still down 4.25% to 6,637.3 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are sinking:

BHP Group Ltd (ASX: BHP)

The BHP share price is down 5.5% to $43.72. Investors have been selling BHP and other large cap miners today amid broad market weakness and a pullback in commodity prices. Concerns that the global economy could fall into a recession has sparked fears that demand for commodities could soften.

Block Inc (ASX: SQ2)

The Block share price is down a disappointing 16.5% to $91.42. This follows a similarly severe decline by this payments company’s NYSE listed shares on Monday night on Wall Street. Block isn’t the only tech shares being hammered today. At the time of writing, the S&P/ASX All Technology Index is down over 5%.

Harvey Norman Holdings Limited (ASX: HVN)

The Harvey Norman share price is down 7% to $3.80. As well as the market selloff, this retailer’s shares have come under pressure after being hit by a broker downgrade. This morning Macquarie downgraded Harvey Norman’s shares to a neutral rating from outperform. The broker fears that consumer spending could be impacted by rising inflation.

PointsBet Holdings Ltd (ASX: PBH)

The PointsBet share price is down 10% to $2.05. This sports betting company’s shares have been caught up in the market selloff. In addition, investors were selling down sports betting shares on Wall Street last night. This saw rival DraftKings tumble a sizeable 16% on the Nasdaq index. The PointsBet share price is now down a disappointing 72% since the start of the year.

The post Why BHP, Block, Harvey Norman, and PointsBet shares are sinking appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 tech shares getting hit hardest today?
• ASX 200 midday update: Block and Zip crash amid market selloff
• Own Zip shares? CEO warned co-founder 8 months ago, ‘There are some clouds gathering on the horizon’ after Morgan Stanley meeting
• Why is the Block share price crashing 18% on Tuesday?
• Wall Street tumbles into bear market. What does that mean for ASX 200 shares?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc., Harvey Norman Holdings Ltd., and Pointsbet Holdings Ltd. The Motley Fool Australia has positions in and has recommended Block, Inc. and Harvey Norman Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. 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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The Imugene Limited (ASX: IMU) share price is struggling on Tuesday despite the company’s silence.

Though, the biotechnology company has hit the headlines again today regarding the trial for its cancer-fighting virus, CF33-hNIS.

The first patient was dosed using the virus therapy as part of the trial last month.

At the time of writing, the Imugene share price is 13 cents, 12% lower than its previous close.

According to the ASX website, it is the seventh biggest faller among ASX 200 shares today.

For context, the S&P/ASX 200 Index (ASX: XJO) is 4.4% lower due to a widespread market sell-off.

Let’s take a closer look at what’s happening with Imugene’s stock on Tuesday.

What’s going wrong for the Imugene share price?

The Imugene share price is suffering on Tuesday despite a positive headline relating to the trial of the company’s CF33-hNIS therapy.

The phase one trial could soon be kicked up a notch as additional patients reportedly wait to receive the therapy.

“The FDA has mandated that you have to wait 28 days before you can dose another patient, because you really want to have that safety profile,” Imugene CEO Leslie Chong told Australian Associated Press in an article published by Yahoo Finance. “So we’re just simply waiting for those 28 days.”

Imugene announced the first patient was dosed with the cancer-fighting virus on 18 May. Tomorrow represents 28 days since the news was released.

By all accounts it’s going well, with Chong commenting:

I’m always pleased when I don’t hear anything, because that means that the patient had lots of safety, and we haven’t heard anything – so we’re really pleased.

Additionally, a non-price sensitive disclosure to the ASX this morning shows an increase in the Imugene shareholdings of one of the company’s directors.

Charles Walker’s indirect holding in the company was upped by 128,000 shares last week. Those shares were purchased on market for 15.5 cents.

The Imugene share price is the worst performer of the S&P/ASX 200 Health Care (ASX: XHJ) index today.

Right now, the sector is down 4.2% with only one of its constituents – Polynovo Ltd (ASX: PNV) — recording a gain.

Imugene wrote to shareholders last month, saying it is “as strong as it ever has been” despite recent struggles for the share price.

The stock has fallen 69% in 2022 so far. It’s also 61% lower than it was this time last year.

The post Why is the Imugene share price one of the biggest ASX 200 fallers today? appeared first on The Motley Fool Australia.

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More reading

• These were the worst performing ASX 200 shares last week
• ‘Storm in a teacup’: Why the Imugene share price is lifting 14% today
• Imugene share price surges 18% to lead the ASX 200 on Thursday
• 2 ASX All Ordinaries shares having a cracking day, despite the carnage
• ASX 200 midday update: Aristocrat’s earnings beat, Webjet flops, retailers smashed

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 positions in and has recommended POLYNOVO FPO. 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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The Ethereum (CRYPTO: ETH) price is nosediving.

The world’s number two crypto by market cap is currently trading for US$1,114 (AU$1,591). That’s down 17% from this time yesterday. That sees the token trading down 79% from its 16 November record highs.

And it’s not just the Ethereum price falling hard.

Most every top crypto is deep in the red, with Bitcoin (CRYPTO: BTC), the world’s original digital token, down 16%.

Celsius (CRYPTO: CEL), meanwhile, is down 28% over the past 24 hours and down 60% since Friday.

Why do we throw the spotlight on Celsius?

Crypto lender suspends trading

There are two major factors putting crypto markets broadly and the Ethereum price specifically under selling pressure today.

First, only a month after the multi-billion dollar losses caused by the meltdown of Terra’s USD stable coin and its supporting token Luna, another major player looks to potentially be in trouble.

Yesterday, global crypto-lender Celsius Network, which promises yields of up to 17% on some of its products, announced it was pausing all withdrawals and trading. Investors fear Celsius may not be able to meet its obligations.

Commenting on the impact of the Celsius announcement on cryptos, and by extent the Ethereum price, Vijay Ayyar, vice president of corporate development Luno said (quoted by Bloomberg):

The Celsius news added fuel to the fire, adding to the uncertainty in the market. There is a lot of pressure on prices as we go into the week of Fed decision coupled with concerns on the protocols offering high-yield products.

Ethereum price tumbles on interest rate fears

More broadly the Ethereum price is tumbling amid a wider sell-off of risk assets.

Yesterday in the United States (overnight Aussie time) the tech-heavy Nasdaq closed down 4.7%. Today in Australia the S&P/ASX All Technology Index (ASX: XTX) is down 6% in late afternoon trading. (The ASX was closed on Monday for the Queen’s Birthday holiday.)

The broad-based selling comes following an unexpected uptick in inflation numbers in the US on Friday.

As you know, inflation in the world’s largest economy has been running hot. Inflation reached 8.5% in March before edging lower to 8.3% in April. That had many analysts forecasting that the US may have seen peak inflation, with predictions of another drop in May.

That didn’t happen, with inflation last month coming in at 8.6%.

That’s seeing risk assets sell off and the Ethereum price crater as investors are now bracing for an even more aggressive tightening cycle by the US Federal Reserve to bring inflation back in line.

The post The Ethereum price just plummeted 17%. What’s going on? appeared first on The Motley Fool Australia.

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More reading

• Could cryptos be facing an upcoming wave of institutional selling?
• What crypto winter? It’s always sunny with Solana
• ‘No crazy bug’: Here’s the latest on the Ethereum merge
• How has the ASX-listed Betashares CRYP ETF been performing?
• What’s the outlook for crypto prices in June? Industry insiders weigh in

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia has positions in and has recommended Bitcoin and Ethereum. 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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If you’re looking for some new exchange traded funds (ETFs) to boost your portfolio with, then the three listed below could be worth considering right now.

Here’s why they could be quality long term options for investors:

BetaShares Global Cybersecurity ETF (ASX: HACK)

The first ETF for investors to look at is the BetaShares Global Cybersecurity ETF. This ETF provides investors with exposure to the leaders in the global cybersecurity sector. BetaShares notes that this is heavily under-represented on the ASX. Which is a shame given that it is a rapidly growing area of the market. Among the companies you’ll be owning a slice of are cyber security giants Accenture, Cloudflare, Crowdstrike, and Okta.

BetaShares Global Energy Companies ETF (ASX: FUEL)

Another ETF that could be in the buy zone is the BetaShares Global Energy Companies ETF. With oil prices on a tear this year, the companies included in this ETF could be well-placed to deliver bumper profits in the near term. The BetaShares Global Energy Companies ETF currently provides investors with access to many of the largest energy companies in the world such as BP, Chevron, ExxonMobil, and Royal Dutch Shell.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

A final ETF for investors to consider is the Vanguard MSCI Index International Shares ETF. This very popular ETF provides investors with exposure to over 1,000 of the world’s largest listed companies from major developed countries. This means that through a single investment, investors are able to buy a slice of companies such as Apple, Johnson & Johnson, JP Morgan, Nestle, Procter & Gamble, and Visa. This makes it a great (and easy) way for investors to add some diversity to their portfolio.

The post 3 popular ETFs for ASX investors to buy now appeared first on The Motley Fool Australia.

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More reading

• 3 ASX ETFs for investors to buy next week
• Waiting to start investing in ASX shares? Today could be a brilliant time to do it
• Are these 2 ASX energy shares a buy amid booming oil prices?
• How has the HACK ETF averaged annual returns of 19%?
• 2 great ETFs I’d buy in June 2022

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BETA CYBER ETF UNITS, BetaShares Global Energy Companies ETF – Currency Hedged, and Vanguard MSCI Index International Shares ETF. The Motley Fool Australia has positions in and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. 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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The Vulcan Energy Resources Ltd (ASX: VUL) share price is deep in the red on Tuesday despite no company announcements.

At the time of writing, the clean lithium developer’s shares are down 12.36% to $5.635.

For context, the broader S&P/ASX 200 Index (ASX: XJO) is sinking 4.37% to 6,629.2 points following heavy falls on Wall Street overnight.

Vulcan Energy shares plummet to 52-week low

Investors are heading for the exits, sending the Vulcan Energy share price to a new 52-week low during trade on Tuesday.

Fears are mounting about an incoming recession next year as inflation continues to spike across global economies.

Last Friday, the release of the United States consumer price index report indicated that inflation rose 8.6% in May. This was above the 8.3% forecast and the highest level in 41 years.

Subsequently, economists are predicting that a recession will likely occur in the early part of 2023.

The Federal Reserve is now more than likely to quickly raise the official cash rate to help ease inflationary pressures. However, this spells bad news for stocks as investors jump ship to better risk and reward alternatives such as government bonds.

With the Dow Jones entering bear market territory, the ASX has followed suit.

The old age saying, “When America sneezes, Australia catches a cold” couldn’t be more right.

The S&P/ASX 300 Metals and Mining (ASX: XMM) industry is currently down 5.81% to 5,654.5 points. This represents a fall of close to 8% in the past week.

Late last month, Goldman Sachs released a bearish report on lithium which sent shockwaves across the battery metals market.

The broker forecasted that lithium prices will sink to around US$16,000 per tonne in 2023. This is a stark contrast compared to the US$71,000 per tonne that is being traded at the moment.

It’s no wonder that with all this negative sentiment that Vulcan Energy shares touched a 52-week low of $5.23 today.

About the Vulcan Energy share price

Since this time last year, the Vulcan Energy share price has dropped by 36% following a difficult couple of months.

Based on today’s price, Vulcan Energy presides a market capitalisation of approximately $741.82 million.

The post Here’s why the Vulcan Energy share price is sinking 12% today? appeared first on The Motley Fool Australia.

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More reading

• 3 ASX All Ordinaries shares that have surged 300% in the past year
• Which ASX lithium shares are producing and which are not?
• Why is the Vulcan Energy share price tumbling 6% today?
• 3 ASX mining shares billionaire John Hancock is buying for rising inflation and the energy transition
• Here’s why the Vulcan share price is charging 6% higher

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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