Why did Lake Resources slip 7% into the red on Friday?

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Shares of Lake NL Resources (ASX: LKE) are struggling today and look set to end deep in the red. As of this writing, investors are paying $1.64 per share for Lake Resources, down 7.37% on the day.

Despite the lack of market-sensitive updates from the miner, ASX resource stocks have moved sharply in recent weeks, with losses extending into today’s session.

In the past month of trading, Lake Resources’ stock price has plunged more than 27% into the red, posting a 15% loss in the previous week alone.

What drives the Lake Resources stock price down?

Investors were initially positive about Lake Resources after it released its quarterly business and cash flow report on April 21.

In his statement, Lake highlighted many growth updates he made throughout the quarter, although they weren’t exactly news.

Perhaps one of the biggest takeaways was the company signing new offtake agreements with Ford Motor Company and Japanese company Hanwa.

However, investor sentiment was already turning sour, with Lake Resources’ share price slipping from a high of $2.29 per share on April 19 straight to today’s levels.

General weakness of the sector

Major indices covering Australian metals, mining and materials companies also fell sharply from that date.

The S&P/ASX 300 Metals & Mining Index (ASX:XMM) has fallen 12% since then alongside the S&P/ASX 200 Materials Index (ASX:XMJ) down 11%.

The decline in both sectors was attributed to a number of factors, ranging from profit taking, the US Federal Reserve’s decision to raise interest rates and capital outflows from exchange-traded funds (ETFs). commodity markets in April.

The price of lithium is not helping the picture, with lithium carbonate eventually peaking and stabilizing before showing its first downward move in over 12 months.

It is now trading at 7% of its highs reached at the end of March 2022.

With general weakness in the sector and a slowing underlying market, several names like Lake Resources have seen their stock prices turn around lately.

Over the past 12 months, Lake Resources’ stock price has climbed over 505% and is still up 62% year to date.