The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) has slumped, and is currently down 0.9%, at 5,175.1 dragged down by heavy losses in the metals and mining, materials and gold sectors, and big falls in mining services companies.
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United Group (ASX: UGL) shares are down 15% to $8.14, after the engineering and mining contractor slashed its full year profit guidance. The company blamed a slowdown in mining investment as miners wind back their capital expenditure, resulting in net profit forecast to come in between $90-$100 million, compared to its previous guidance of $150-$180 million.
Monadelphous Group (ASX: MND) has lost 9.6% to trade at $17.97, following recent disappointing trading updates from other mining services companies. Overall, the trend appears that projects across mining, infrastructure and even oil & gas are either being delayed or cancelled. While mining investment is forecast to end this year or next, actions by the big miners suggest capital expenditure may already have peaked.
Downer EDI Limited (ASX: DOW) fell 9.7% to $4.18. Like Monadelphous and United Group, Downer has a heavy exposure to the resources industry, providing contract mining, blasting and drilling and construction services amongst others. While many services companies had assumed that contracts and revenues have been locked in, we’ve seen that that’s not the case, and contracts are being cancelled or postponed.
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