Why ASX uranium shares are diving double-digits on Monday

The uranium sector is cooling off today. Here’s why.

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ASX uranium shares have pulled back sharply on Monday following a weak open for the S&P/ASX 200 Index (ASX: XJO).

Steep declines for the uranium sector

ASX uranium shares opened to a sea of red on Monday.

The largest ASX-listed uranium player, Paladin Energy Ltd (ASX: PDN), is currently down 14.56% to 88 cents.

Energy Resources of Australia Limited (ASX: ERA) is another large uranium player, down 6.19% to 45.5 cents.

Advanced explorers such as Boss Energy Ltd (ASX: BOE) and Deep Yellow Limited (ASX: DYL) are down double digits, sinking 15.94% and 15.69% respectively.

At the smaller end of town, explorers such as Peninsula Energy Ltd (ASX: PEN), Bannerman Energy Ltd (ASX: BMN) and Vimy Resources Ltd (ASX: VMY) are also logging consistent declines, all down around 15% or more.

92 Energy Ltd (ASX: 92E) is the only ASX uranium share to tip higher, surging 28.3% to $1.025 after announcing a uranium discovery at its Gemini Project.

What’s driving ASX uranium shares lower?

ASX 200 selloff

The ASX 200 is currently down 1.55% to a 2-month low of 7,289.

From iron ore to lithium, nothing is safe with a 4.3% plunge in the S&P/ASX Materials (INDEXASX: XMJ) Index.

The weakness in both the broader market and resources sector is likely a contributing factor in the panic taking place across ASX uranium shares on Monday.

Uranium sector pulls back

The Global X Uranium ETF (NYSE: URA), which invests in a broad range of companies engaged in uranium mining and nuclear components tumbled 7.83% last Friday.

The fund’s top holdings include the world’s largest listed uranium company, Cameco Corporation, and the world’s largest producer, Kazatomprom.

Both Cameco and Kazatomprom fell sharply last Friday, down 6.53% and 4.42% respectively.

The fund also holds a number of ASX uranium shares including Paladin Energy, Boss Energy, Bannerman Energy, Deep Yellow and Peninsula Energy.

Motley Fool contributor Kerry Sun 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 Bruce Jackson.

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