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Why these 4 ASX shares are starting the week in the red

The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has had a disappointing start to the week and is down 0.6% to 5,995 points in afternoon trade.

Four shares that have fallen more than most today are listed below. Here’s why they have started the week in the red:

The Beach Energy Ltd (ASX: BPT) share price has fallen 8% to $1.58 after oil prices gave back some of their recent gains. Oil prices finished the week with declines of around 4% on Friday and this has continued during trade today. According to Bloomberg, at present the WTI crude oil price is down a further 2.5% to US$66.13 a barrel and Brent crude oil is off 2.2% to US$74.74 a barrel. Prices have been falling after OPEC and Russia indicated that they would increase production to offset supply disruptions from Iran and Venezuela.

The ERM Power Ltd (ASX: EPW) share price has dropped 5.5% to $1.56. Brokers have reacted negatively to the electricity seller’s recent trading update which revealed an underperformance from its US operations. Analysts at Macquarie have reduced the target price on ERM Power’s shares to $1.39.

The Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price has recovered slightly and is down just 1.5% to $12.00 in afternoon trade. This morning the sleep treatment company released its full-year results. Although its full-year profit and final dividend were ahead of the market’s expectations, its guidance for FY 2019 fell short of analyst forecasts. I think its shares are expensive and feel its current growth profile doesn’t justify the premium.

The Metcash Limited (ASX: MTS) share price has plunged 15% lower to $3.12 after warning of the potential loss of one of its major supply contracts. According to the release, Drakes South Australia has told the company that it will not be making a commitment to have its supermarkets in South Australia supplied from Metcash’s proposed new distribution centre. The current supply agreement with Drakes Supermarkets in South Australia runs to June 2019 and contributed total sales of approximately $270 million in FY 2018. I would suggest investors stay clear of Metcash until the full details are known.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ERM Power Limited. 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 Scott Phillips.

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