Why these 3 top ASX 300 stocks dragged the benchmark lower this week

Investors were hitting the sell button on these top ASX stocks over the week. But why?

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Three leading S&P/ASX 300 Index (ASX: XKO) stocks hit the skids this week.

With a bit more than two hours of trading left in the week, the ASX 300 is down 0.8% since last Friday's closing bell, despite today's 0.6% intraday gain.

A number of companies underperformed the index of top 300 stocks over the week. However, these three big name ASX 300 shares have earned top spots on the weekly laggard board.

Namely mining giant Fortescue Ltd (ASX: FMG), BNPL stock Zip Co Ltd (ASX: ZIP), and biotech company Mesoblast Ltd (ASX: MSB).

Interestingly, none of the three companies released any price-sensitive information over the week.

Here's what we do know.

ASX 300 stocks with a week to forget

The Fortescue share price closed last Friday at $26.77. At the time of writing, shares are swapping hands for $24.48, down 8.5%.

The Fortescue share price remains up 27% since this time last year. But the ASX 300 stock is now well into the red for 2024.

This week's selling pressure looks to have been driven by some gloomy forecasts for China's steel demand.

Despite increased stimulus measures from China's government, many analysts believe the nation's sluggish property sector will continue to struggle, impacting iron ore demand.

Iron ore slipped 2.6% overnight to trade for US$115.85 a tonne.

Commenting on the outlook for iron ore demand earlier this week, ANZ Group Holdings Ltd (ASX: ANZ) noted (courtesy of The Australian Financial Review), "The iron ore market remains unconvinced the recent property support measures in China will be successful in boosting demand."

ANZ added:

Futures declined for a second day, alongside a sell-off in shares of Chinese property developers. Stockpiles at Chinese ports remain elevated without any signs of a notable drawdown. Steel mills are also still making losses, with margins under pressure amid weak steel prices.

Mesoblast shares also took a tumble this week.

The ASX 300 stock closed last Friday trading for $1.18 a share. In late afternoon trade today, shares are trading for $1.07 apiece, down 9.3%.

There's no clear reason for this sell-off, other than the mammoth gains posted by the biotech company since it reported on promising communications with the US Food and Drug Administration (FDA) back on 26 March.

At market close last Friday, the Mesoblast share price had rocketed 251.5% since the release of that announcement.

So this week's sell-down, which still sees the stock up 224.2% since 26 March, is likely nothing more than some profit-taking.

Which brings us to the third falling ASX 300 stock, Zip.

Zip shares closed last Friday trading for $1.21. At the time of writing, shares are changing hands for $1.13 apiece, down 6.4%.

With the Zip share price still up an eye-watering 176.1% over the past six months, I reckon there's also been a little profit-taking going on here.

The ASX 300 stock could also be catching additional headwinds from the stronger-than-expected inflation figures reported by the Australian Bureau of Statistics (ABS) on Wednesday.

As we're seeing in the United States, inflation down under is proving to be more resilient than expected. That means investors are bracing for higher rates for longer and potentially even another rate hike.

And BNPL companies like Zip have proven to be very sensitive to higher interest rates.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Zip Co. The Motley Fool Australia has no position in any of the stocks mentioned. 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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