BHP Billiton Limited (ASX: BHP) has been a big casualty in today's heavy selloff. The miner's shares have fallen 5.8%, compared to a 2.7% fall for the broader S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).
Despite its staggering dividend yield, which has now climbed to 7.7% fully franked, investors continue to avoid the stock based on the headwinds facing the resources industry.
Although BHP Billiton remains one of the lowest cost operators, and one of the industry's most diversified, each of its primary commodities are under intense pressure. Copper and coal are both hovering near multi-year lows while iron ore and oil, which are BHP's two most important resources, are also expected to fall further in the coming months.
Today's heavy fall can also be attributed to the plunge in Glencore's share price in London overnight. The commodity trader's shares fell more than 23%, despite the absence of any specific news, spreading fears throughout the resources industry.
It is for this reason that Rio Tinto Limited (ASX: RIO) and Santos Ltd (ASX: STO), among various others, have also fallen today. The pair are down 4.5% and 7.8% respectively.
With BHP's shares now sitting at a seven-year low price, some investors will recognise this as an opportunity to buy. However, it is important to realise that BHP's shares could certainly fall lower than their current level, especially considering the uncertainty regarding China's future growth prospects.
In my opinion, investors should avoid BHP Billiton, and other companies in the resources sector, for now.
