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Why Cann, Independence, Macquarie Telecom, & Northern Star are dropping lower

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In afternoon trade the S&P/ASX 200 index has followed the lead of U.S. markets and is on course to record a strong gain. At the time of writing the benchmark index is up 1% to 6,884.1 points.

Four shares that have failed to follow the market higher on Thursday are listed below. Here’s why they are dropping lower:

The Cann Group Ltd (ASX: CAN) share price is down 4% to 84 cents. This decline appears to be down to profit taking after some incredible gains in recent weeks. Excitement around its manufacturing progress led to the cannabis company’s shares rocketing 150% higher between December 13 and January 6.

The Independence Group NL (ASX: IGO) share price has fallen almost 3% to $6.72. This decline is likely to be due partly to the nickel producer’s exposure to gold through its Tropicana operation. Gold prices tumbled overnight after the easing of tensions in the Middle East. In addition to this, Ord Minnett slapped a hold rating and $5.70 price target on its shares this morning. This price target is notably lower than today’s share price.

The Macquarie Telecom Group Ltd (ASX: MAQ) share price is down 2% to $24.51. This decline could be down to profit taking after a strong run over the last few months. The data centre, cloud services, and telecom company’s shares closed at a multi-year high of $25.00 on Wednesday. Investors appear to believe the cloud computing boom will drive strong growth in the coming years.

The Northern Star Resources Ltd (ASX: NST) share price has fallen 3.5% to $11.78.  Investors have been selling Northern Star and the rest of the gold miners after the gold price dropped lower. According to CNBC, overnight the spot gold price fell 1.15% to US$1,556.20 an ounce. This was in response to the easing of tensions in the Middle East despite Iran’s missile attacks. The S&P/ASX All Ords Gold index is down 2.6% at the time of writing.

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Returns as of 6th October 2020

Motley Fool contributor James Mickleboro has no position in any of the 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 Scott Phillips.

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