Today's rally on the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) petered out, with the market ending up just 0.2%, despite gains of over 1% on US markets overnight.
The culprit was a huge selloff on the China's Shanghai Composite Index, which had dropped 6.9% in late afternoon trading. It was the biggest fall in six years, after two of the nation's biggest listed brokerage firms were suspended from lending money to new equity trading clients.
Regulators are attempting to crack down on a surge in margin loan levels, which has seen the Shanghai Index soar 61% in the past 12 months on record volumes.
These 4 stocks were hammered today.
Ensogo Ltd (ASX: E88) fell 18.5% to just 11 cents. Previously known as iBuy, Ensogo has seen its share price drop by 67% in the past six months. Today's fall may be as a result of the Chinese news above. Ensogo is a retail website operator focused on Asia and has yet to turn a profit. That may be some way off, but until then it seems the company faces a rough and rocky road.
Antares Energy Limited (ASX: AZZ) dropped 14.7% to 14.5 cents. The oil and gas stock was likely sold off on news that a growing number of US shale oil and gas drillers are putting drilling rigs on hold. Many shale oil projects are unprofitable at current prices, hence the reason 74 US onshore oil rigs were shut in the last week, according to US oil field services giant Baker Hughes. Antares' flagship operations are in the US.
OzForex Group Ltd (ASX: OFX) fell 10.3% to $2.43, after the company announced that it had lost Westpac Banking Corp (ASX: WBC) as one of its partners. Investors may have also been unnecessarily worried about the foreign exchange provider's exposure to the Swiss franc, after a number of currency trading firms went bust. OzForex notes (PDF) that its Swiss francs client funds flow represents less than 1% exposure, and does not engage in proprietary trading and was unaffected by the event.
Arrium Limited (ASX: ARI) slipped 7% to 20 cents, as iron ore prices remain under US$70 a tonne. The last price was US$68.61 per tonne, but many analysts expect more pressure on prices in the short term, and for higher-cost producers such as Arrium, that's a dangerous trend.
