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ASX pummelled: 5 ASX stocks getting crushed by the market

Friday’s 1.3% fall in the S&P/ASX 200 (INDEXASX: XJO) extended the index’s weekly loss to 2.2% but more importantly it has completely wiped out the gains for 2014 and taken the index to a six-month low.

Amongst the losers not just on Friday but also over the past six months, two sectors stand out – iron ore producers and financial services.

Iron ore struggles

Mount Gibson Iron Limited (ASX: MGX), Atlas Iron Limited (ASX: AGO) and BC Iron Limited (ASX: BCI) are all amongst the top ten losers in the S&P/ASX 200 Index. All fell by more than the index on Friday, but more significantly all three stocks are down over 40% this calendar year.

With the iron ore price continuing its fall to new yearly lows, iron ore investors will be hoping that the bulk commodity is nearing a floor. They could be right but that doesn’t mean the price will be heading much higher anytime soon.

Leverage works both ways

Likewise, stocks with exposure to equity markets which have enjoyed the leverage to rising markets have done an about face. This week leading global fund managers Platinum Asset Management Limited (ASX: PTM) and Henderson Group plc (ASX: HGG) fell 3.1% and 6% respectively. More tellingly, since the beginning of 2014 Platinum has fallen 14.2%, while Henderson has dropped 11%.

Declining equity levels generally mean declining funds under management (FUM) which in turn means declining fees for fund managers. The one exception to this is if a fund manager is either short the market or can produce outperformance fees which balance the drop in FUM fees. In this respect Platinum is particularly interesting as it has a history of performing well in down markets, therefore price weakness could create a buying opportunity for investors.

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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

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