Why resources and energy companies are being hammered today

The ASX’s listed resources and energy companies have seen their share prices hammered in early trading today dragging the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) down 0.7%.

In the Top 20, BHP Billiton Limited (ASX: BHP) has seen its share price lose 3.7% to trade around $18.89. Spinoff South32 Ltd (ASX: S32) has seen its share price lose 3.2% to trade at $1.62 and Rio Tinto Limited (ASX: RIO) has seen its share price sink 2.4% to $44.37.

In the energy sector, Santos Ltd (ASX: STO) is down 1.9% to $4.72 and Origin Energy Limited (ASX: ORG) has dropped 1.6% to $5.90.

Most of the falls can be attributed to falling commodity prices overnight.

Brent Crude Oil fell 1.3% to US$51.85 a barrel, after weeks of steady gains saw the benchmark price rise from below US$44 a barrel. Earlier in the day, the commodity hit its 2016 all-time high of US$52.86 a barrel, but the chances of oil heading back above US$100 a barrel are small.

Copper futures fell to their lowest levels in nearly four months, as rising stockpiles show demand can’t keep up with a global supply glut. China’s copper imports in May also fell for the second consecutive month, according to customs data.

Spot gold also fell, losing 0.3% to US$1,269.40 an ounce, and platinum was down, giving the resource-heavy ASX a headache in early trading.

The big miners were hit particularly hard after news reports emerged that BHP is looking at opening a huge new iron ore mine as we wrote earlier today.

Foolish takeaway

Looking at Bloomberg’s commodity index suggests that commodities prices may have hit bottom, which is good news for the resources and energy companies mentioned above. There will be occasional pullback days like this though.

Forget companies cutting dividends like BHP and Rio Tinto when you can get GROWING dividends.

This "dirt cheap" company. is growing like gangbusters, and trading on a fat dividend yield, FULLY FRANKED. With interest rates set to stay at these low levels for years to come, for income-hungry investors, including SMSFs, this ASX company could be the "Holy Grail" of dividend plays for 2016. Click here to gain access to this comprehensive FREE investment report, including the name of this fast growing ASX dividend share. No credit card required.

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

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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