BHP took a beating on the Australian market today.
Shares in world’s biggest miner fell below the key support level of $18 and hit their lowest level in a decade.
At the close, they were down 5.2% to $17.05, a long way below $24.90 of four weeks ago.
The fall, sparked by further weakening of commodity prices, represents about one fifth of the S&P ASX 200 losses today. The index closed down 0.9% at 5,108.60 points.
“BHP is getting destroyed today,” Chris Weston of IG told Business Insider. “It’s not a pretty picture to be a BHP shareholder at the moment.”
He says everyone is questioning how much further commodity prices can fall. World oil prices fell to seven year lows overnight.
“You’ve got to be the biggest contrarian fund at the moment to start buying the energy sector or the materials sector,” Weston says.
“For me this is an absolutely perfect market to be shorting the stock. These are the conditions where no-one really wants to buy. You have so much negativity towards oil prices, so much negativity towards iron ore and no-one knows where the bottom is for both of those two.”
And the BHP share price has been under intense pressure since the fatal disaster in Brazil at the Samarco iron ore mine last month. Analysts calculate impact from the mud slide will strip about 4% from BHP’s profits,
There also will be very large compensation payments to be made for the loss of at least 12 lives, the damage to a local village and reported pollution of a river system.
Other miners were also being hit hard with Rio Tinto at $42.40, down 4.3%, and BHP spinoff South32 down 8% to $1.03.
Woodside Petroleum was at $26.89, down almost 4%, and Santos shed 13% to $3.31.
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