On a day when Australian shares have been sold down heavily, BHP Billiton Limited (ASX: BHP) appears to have been hit particularly hard with its shares down 2.1% to $30.12. Earlier in the session, they fell as low as $30.01.
Although BHP Billiton is the world's largest and most diversified miner, it is still impacted by unfavourable movements in commodity prices. That has certainly been the case today after the price of iron ore slipped 4% to roughly US$53 a tonne, according to the Metal Bulletin, while oil prices also slid more than 5%. Iron ore and oil are BHP Billiton's two most important commodities, accounting for more than 50% of revenues in the 2014 financial year.
At $30.12, some investors might be tempted to start building a position in the Big Australian. Indeed, BHP Billiton would be my miner of choice if I wanted exposure to Australia's resources sector. But right now, even BHP Billiton seems like too big a risk.
Commodity prices are expected to continue falling further over the coming months, or even years. The immediate future is certainly unclear indicating plenty more volatility for stocks such as BHP Billiton. As such, it seems likely that investors who remain patient could be given a far better opportunity to buy the stock than what they are being offered right now.