Bad news for resources stocks as China's imports slow

ASX falls 0.5% and BHP ranked 9th most profitable company in Fortune 500

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The S&P/ASX 200 index (Index: ^AXJO) (ASX: XJO) fell 0.5% to close at 4,098.3 on news that China's imports for May rose just 6.3%, less than half the 12.7% forecast according to Reuters. The market staged an early rise, but the news from China hit our markets and shares plummeted.

China's imports from Australia in June rose just 1.7% from a year ago. Chinese domestic demand sagged, which is bad news for our exporters including resources companies. China is our biggest export market.

Nouriel Roubini (known in the popular press as Doctor Doom) has predicted the global economy will suffer the perfect storm next year that could be worse than the GFC. By 2013 he said the Eurozone debt crisis could speed up as the US heads for recession and emerging markets countries, Brazil, Russia, China and India slowed down sharply. And all that could be compounded by an inevitable war between the US, Iran and Israel. Talk about doomsaying.

The Australian dollar has fallen slightly against the US dollar, as investors seek a safe haven. It's currently trading around 101.85 US cents.

Company News

Myer Holdings Limited (ASX: MYR) shares fell 7% to $1.67, after rising 17% in the last five days, following the David Jones Limited (ASX: DJS) aborted takeover bid, and renewed enthusiasm for retail stocks.

The Sydney Morning Herald reports that prices for business-class seats are at their lowest levels in real terms in almost 20 years, thanks to ongoing competition for corporate travellers between Qantas Airways Limited (ASX: QAN) and Virgin Australia Holdings (ASX: VAH).

BHP Billiton (ASX: BHP) has been ranked the 9th most profitable company in the Fortune 500, ahead of companies like Microsoft, Volkswagen, Ford, Wal-Mart, IBM and GE.

Winners and Losers

Of the top 10 stocks on the ASX, only Telstra Corporation (ASX: TLS) managed to end up, rising 3 cents to $3.81. Westpac Banking Corporation (ASX: WBC) was the best of the banks, ending flat.

Newcrest Mining Limited (ASX: NCM) led the falls in the majors, dropping over 3% to end at $22.67, a far cry from its 52 week high of $41.50. Brambles Limited (ASX: BXB) saw its shares lose 1.8%, ending at $6.14.

BHP Billiton and Rio Tinto Limited (ASX: RIO) also saw 1% falls.

The Foolish bottom line

The Australian market continues to find reasons to post losses – investors seem to have one eye on the exit. Something tells me this may look like a missed opportunity in five years' time.

If you're in the market for some high yielding ASX shares, look no further than our "Secure Your Future with 3 Rock-Solid Dividend Stocks" report. In this free report, we've put together our best ideas for investors who are looking for solid companies with high dividends and good growth potential. Click here now to find out the names of our three favourite income ideas. But hurry – the report is free for only a limited time.

More reading

Motley Fool writer/analyst Mike King owns shares in BHP. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »