Has the market panicked?

3 ASX stocks hammered in the sell-off

a woman

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) has closed down 0.6%, ending at 4,303.5, led by the falls in the banks and other defensive stocks. Volumes were low as investors sat on the sidelines, before the European Central Bank’s meeting on Thursday. According to media reports, markets are predicting that the bank will cut official interest rates by 0.25% to 0.5%.

The big news of the day was that the Reserve Bank of Australia kept official interest rates unchanged at 3.5%.

Despite low trading volumes and the market rising, these three stocks were pummelled.

The world’s biggest provider of mineral drilling services, Boart Longyear Limited (ASX: BLY) shares were smashed down 11% to $1.27. In the last five days, the shares have lost 47% of their value, following comments last week by the CEO that the company was unable to forecast earnings in the next financial year. Slowing growth in China, concerns around the European debt crisis and potential for miners to cancel much of their exploration drilling have weighed on the stock. As the CEO said in an interview with Bloomberg, “Miners are deciding to pause for a minute and go back and just try and get as much ore out of the ground at the best cash cost”.

NRW Holdings Limited (ASX: NWH) saw its share price fall 19 cents, or 8% to close at $2.23. Like most other mining services companies, NRW has seen its share price smashed over the last week, down 23%, in the last five days. Fears that mining contracts will soon dry up, has seen most, if not all mining services companies punished.

Iron ore miner, Gindalbie Metals Ltd’s (ASX: GBG) shares fell 6% to close at 31 cents. Analysts have cut their recommendations on most of the iron ore miners, Gindalbie included, as the iron ore price fell to around US$90 a tonne, compared to US$135 a tonne, just over a month ago. Investors appear to be concerned that the company’s cost of production is relatively high, compared to the commodity price.

The Foolish bottom line

Markets tend to over-react on many occasions, both up and down, and potentially may have done the same with the above three stocks. If iron ore stocks and mining companies’ shares continue to fall, it may be a fertile sector to pick up some bargains.

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 doesn’t own shares in any companies mentioned. 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 »

asx share price competitions represented by businessmen arm wrestling
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 »

person reading news on mobile phone
⏸️ 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 »