Why these 4 ASX shares are plunging today


The S&P/ASX 200 (Index: ^AJXO) (ASX: XJO) is climbing higher again today on the back of a strong day for the healthcare sector and some modest share price appreciation from the index-dominating banks. However, some stocks are sliding for a variety of reasons. So let’s take a look at what may be driving the selling in some of today’s big losers.

St Barbara Ltd (ASX: SBM) shares have plunged around 9 per cent to $3.01 this afternoon as investors take profits after what has been a strong run for gold miners on the ASX. The price of gold has been moving in mysterious ways against a backdrop of negative global interest rates, a flattening yield curve, Brexit, and a strengthening US economy. All this means St Barbara shares are likely to remain volatile due to the unpredictable outlook for the price of gold.

Northern Star Resources Ltd (ASX: NST) is another victim of today’s gold price weakness with its shares down 8 per cent in afternoon trade as investors book profits given the stock is up more than 130 per cent over just the past year. Northern Star is also a beneficiary of the appreciating US dollar as gold is sold in US dollars, while operating costs are largely incurred across its Australian mining operations.

Pilbara Minerals Ltd (ASX: PLS) is a WA-based lithium miner that has been riding the wave of enthusiasm for lithium miners as the commodity’s price soars on rising demand. The excitement is a result of the launch of the new Tesla Model 3 and the prospect of generally explosive demand for the lithium required to power electric batteries. The stock is up 283% over the course of the past year as the company says its WA Pilgangoora tenement is the world’s leading lithium development project. The stock is likely to remain volatile due to its speculative nature and the uncertain outlook for lithium supply and demand.

Catapult Group Ltd (ASX: CAT) is the sports analytics business that is growing sales of its wearable tracking devices for sportspeople at red-hot rates. The company recently announced a $100 million capital raising to acquire two rival sports analytics companies with new equity to be issued to eligible investors at $3 per share. Today the stock has fallen 5.8% to $3.78 as investors struggle to value the company given its rapid growth and intention to grow by acquisition.

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Motley Fool contributor Tom Richardson has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.