The Australian market dropped almost 1% today, the fourth negative day in a row, as cautious investors sold down miners with exposure to iron ore.
Fortescue Metals, which has 100% exposure to iron ore prices which hit a five year low of US $70 a tonne, lost another 3.65% in value to $2.64 during intense selling.
The company share price, which was down as much as 8% today before recovering, has lost more than 50% since the start of 2014 on fears its production is approaching an uneconomical base.
Most of the trading was thin except for Fortescue where more than 62 million shares changed hands.
The big miners suffered including BHP, which was weaker by 2.6% to $31.80, and Rio Tinto, down by 2.71% to $56.41.
The major banks, except Westpac which was down 0.76% to $32.54, and the financial stocks were mostly steady.
Investor sentiment wasn’t helped by China manufacturing statistics which came in weaker than expected and sent the Australian dollar down.
The local market has been getting little leadership from Wall Street where the S&P 500 index closed down overnight by 0.2%.
First, the scoreboard:
- S&P ASX 200: 5,316.20 -52.64 (-0.98%)
- All Ordinaries: 5,302.40 -50.05 (-0.94%)
- AUD/USD: 0.8607 -0.0010 (-0.12%)
And the top stories on Thursday:
– More iron ore fallout. Fortescue Metal’s share price has dropped more than 50% this year, following the price of iron ore down. This has cut by half company founder Andrew “Twiggy” Forrest’s fortune to about $2.8 billion and dragged him from the richest 10 people in Australia list.
– The bears are mauling the Australian dollar. Iron ore, the RBA, a slowing growth profile in Australia, a hole in Treasurer hockey’s budget, Chinese bad loans and slowing growth have all combined this week to knock the Aussie back to a low of 0.8592.
– Quickflix, the ASX-listed local media streaming and DVD lending company, launched a rights issue to raise $5.7 million to fund investment in content and marketing. It’s welcomed the announced entry of US streaming giant Netflix to Australia in March.
– Despite the hammering received by miners in the market today, BHP was upbeat at its AGM about plans for a demerger. The split of BHP into two companies is on track and will go to a vote of shareholders in May next year.