The rise and fall of BHP Billiton Limited (ASX: BHP) happened so quickly. One minute, the shares were riding high on the market's great expectations and threatening to break through their 52-week high price. The next, they were plummeting on the back of tumbling iron ore prices and BHP's decision not to initiate a widely-anticipated share buyback program.
After reaching $39.74 on the eve of its annual results presentation, the mining heavyweight's stock sank more than 10% within three weeks to a low of just $35.51. Indeed, BHP has acted as a significant drag on the overall S&P/ASX 200 (INDEXASX: XJO) index in that time, which fell to a three-week low on Monday.
However, the stock seems to have made a slight recovery. It rose 44 cents or 1.2% on Tuesday and is now trading at $36.10, sparking questions as to whether it has now bottomed out, or if there is more pain to come.
Unfortunately, which way the stock will go today or tomorrow is anyone's guess. Whatever happens, I reckon it'll largely depend on the movement of the iron ore price. It is now sitting at its lowest price in more than five years at just US$83.60 per tonne, while some analysts believe it could sink as low as US$75 per tonne in the near term. That could seriously hurt BHP Billiton's share price, along with the shares of other iron ore miners like Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG).
