The Australian sharemarket has fallen 6.84% between early September and Friday's close. The plunge was certainly expected to happen eventually and appears to have come as a result of the following factors:
- The iron ore price has fallen (and remained) around the $80 mark;
- Geopolitical tension is peaking, with issues in Asia, the Middle East and Russia making investors and governments' nervous;
- The oil price has unexpectedly fallen to multi-year lows, despite some of the world's largest oil producers being involved in the fracas mentioned above;
- Australian consumer confidence has remained stubbornly low;
- The Australian property market bubble debate continues to rage;
As a result, essentially every sector on the Australian sharemarket has been hit, and hit hard. Small caps have underperformed, while some large caps have done even worse. Mining and energy stocks have been among the worst performers, however some strong companies' reliant on consumer interaction have fallen surprising amounts.
Here are 10 blue chips that have plunged over the last month.
- Santos Ltd (ASX: STO), down 10.92%, Energy
- REA Group Limited (ASX: REA), down 8.92%, Digital Classifieds
- QBE Insurance Group Limited (ASX: QBE), down 8.83%, Insurance
- Asciano Ltd (ASX: AIO), down 8.7%, Transport
- Fortescue Metals Group Limited (ASX: FMG), down 8.51%, Mining
- ResMed Inc. (CHESS) (ASX: RMD), down 8.19%, Health
- AMP Limited (ASX: AMP), down 7.69%, Finance
- SEEK Limited (ASX: SEK), down 7.54%, Digital Classifieds
- Crown Resorts Ltd (ASX: CWN), down 6.61%, Gambling
- Coca-Cola Amatil Limited (ASX: CCL), down 5.64%, Beverages
Importantly, investors should remember that selling now could be the worst possible moment. Many market commentators (including myself) believe that this dip will quickly reverse and that now represents a great opportunity to pick up quality companies at a discount.
