Fortescue Metals Group Ltd (ASX: FMG) shares have seen plenty of volatility since the start of the year. The ASX mining share's movements can often be linked back to changes in the iron ore price, but it's interesting to know which way investors have been going on the ASX iron ore share.
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Strong volumes traded
AUSIEX provides trading solutions for financial institutions, intermediaries, advisers and industry participants, and it has provided information on the most traded ASX stocks over the 10 weeks to 30 July 2023.
It's not surprising that the three most traded ASX stocks are three of the largest on the ASX by market capitalisation, being BHP Group Limited (ASX: BHP), Westpac Banking Corp (ASX: WBC) and Commonwealth Bank of Australia (ASX: CBA).
ASX lithium share Pilbara Minerals Ltd (ASX: PLS) was fourth on the list and in fifth place was Fortescue.
Selling action
According to AUSIEX, 39% of contract note volume represented buys, while the other 61% were sells.
With that in mind, it may be unsurprising to know that the Fortescue share price dropped by more than 2% in July and has fallen 9% since 30 June 2023.
Why are investors selling Fortescue shares?
Without asking every single investor why they sold, it's hard to truly know why people are selling down their holdings.
But, there are a couple of things that have happened which could explain things.
As reported by various media outlets, including Reuters, the Chinese economy has not been firing on all cylinders at all. It recently cut interest rates amid concerns of a weakening economy. Reuters quoted economist Julian Evans-Pritchard from Capital Economics who said:
All the main activity indicators undershot consensus expectations in July, with most either stagnant or barely expanding in month on month terms.
And with financial troubles at developers such as Country Garden likely to weigh on the housing market in the near-term, there is a real risk of the economy slipping into a recession unless policy support is ramped up soon.
That's not great news for Fortescue shares considering how much of the global iron ore China buys. Chinese stimulus might help the situation, but that hasn't happened yet.
Fortescue shares may also be under pressure because it's facing court as traditional owners of land that Fortescue has mined on are seeking at least $500 million, according to reporting by the ABC and others. Yindjibarndi elders have been in court to give evidence.
The ABC reported that Fortescue's lawyer Brahma Dharmananda did not refute suggestions of the destruction of sacred sites, so we'll have to see how this court case ends up.
Fortescue share price snapshot
Since the start of 2023, Fortescue is down just 1%.
