Australia’s mining big-boys Rio Tinto and BHP got smashed today, as investors pulled out of resources, with around $20 billion wiped off the value of the local market.
Both RIO and BHP were down in early trading, with investors concerned about global growth, said Commonwealth Bank equities economist Savanth Sebastien.
Things got worse during the day, with the only good news a $1.1 billion Australian Defence Department contract announced by Telstra.
At 3.27pm EST BHP was down 4.27%, or $1.28 to $30.69.
RIO was down more than 4.5% or $2.52 at $52.08 at 3.28pm EST.
Fortescue Metals Group told the market today that it was meeting its full-year production targets. But at 3.29pm EST it was down a whopping 7.26% or 28 cents to $3.45.
At close of trade the Australian market was well below the 5000 mark, finishing down 77.7 points at 4926.9.
“There are quite a few negative factors working against the resources sector.
“Resources stocks have been hit hard,” Sebastien said.
Investors were discouraged by global data, notably out of China where the government recently warned its economy slowed to 7.7% growth in the first quarter compared to the same period last year, Sebastian said.
Talk of the United States Federal Reserve winding down its $US85 billion per month bond-buying program in its latest minutes was also playing a role, he said.
“Commodities are being hit across the board.”
Meanwhile, BHP unveiled incoming CEO Andrew Mackenzie’s new management team, emphasising a focus on efficiency at the world’s biggest miner.
Sebastian said the appointments underscore a focus on cost control and capital management in the resources sector.
Now, it’s all about “bedding down” projects, he said.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.