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Here’s why these 7 ASX stocks were slammed down hard today

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It wasn’t a great day on the ASX today, with the S&P/ASX 300 (INDEXASX: XAO) (ASX: XAO) closing down 0.3%.

The big oil and gas producers Woodside Petroleum Limited (ASX: WPL) and Santos Ltd (ASX: STO) and a couple of large insurers fell the most out of the top 20, helping to drag the market into the red.

Here’s why these stocks plummeted today…

With Brent oil crashing down 4.2% to US$54.67 per barrel on Friday, it clearly wasn’t going to be a good day for ASX-listed oil stocks today. Lonestar Resources Ltd (ASX: LNR), Senex Energy Ltd (ASX: SXY), Horizon Oil Ltd (ASX: HZN) and AWE Limited (ASX: AWE) fell 10%, 8.8%, 7.1% and 4.7% respectively.

GI Dynamics Inc (ASX: GID) dropped 7.1% to trade at just 13 cents, despite on-market purchases of shares in the company on Friday by two different directors. They say company insiders sell for many reasons but only buy for one (they see shares cheap). Year to date, GI Dynamics shares have fallen off a cliff – plunging 46%, after the company’s EndoBarrier Therapy clinical trial in the US was placed on hold thanks to 4 cases of liver infection in early March. GI Dynamics appears to have a tough road ahead now.

Mirabela Nickel Limited (ASX: MBN) also dropped 7.1% to would you believe 13 cents? Nickel prices that hit more than US$9 per pound (/lb) a year ago, are now trading below US$7/lb. While the company is forecasting prices of above US$9/lb again in 2016, investors clearly aren’t buying it. Mirabela has also faced a number of other issues including a contract dispute with a large customer Norilsk and reduced reserves at one mine, cutting one mine’s useful life by 5 years.

MMA Offshore Ltd (ASX: MRM) ex-Mermaid Marine, fell 6.6% to 77.5 cents. MMA Offshore provides a fleet of ships to support the offshore oil sector, and has suffered as oil prices plunged over the past twelve months. The company’s shares have dropped 66% over the same period – as lower oil prices mean deep water drilling is much more expensive – and potentially unprofitable at today’s prices. As a worst case, that could see MMA’s work dry up, leaving it with high fixed costs and little in the way of revenues.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

 

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