It’s been another day to forget for the S&P/ASX 200 (^AXJO) (XJO.AX). The index is down almost 70 points, or 1.5%, which has largely been caused by heavy falls in the mining sector.
Spot iron-ore shed 1.7% on Friday to sit at US$118.60 per tonne, supporting concerns that the commodity’s rally would not be sustainable. The metal rose more than 8% last week, after surpassing its US$110 mark the week before. However, analysts have feared that the rise would only be temporary – and it’s expected that its price will still fall under US$100 in the third quarter.
The market has been further weighed down by ex-dividend movements in 20 stocks, including BHP Billiton (BHP.AX). The movements were expected to contribute towards a loss of 8.6 index points, whilst BHP expected to fall around 1.7% to finish at $31.91. Instead, the mining heavyweight has shed 3.2% and is sitting at $31.40.
Furthermore, Rio Tinto (RIO.AX) is down 2% and investors continue to sell their shares in Fortescue Metals Group (FMG.AX) after their production downgrade last week. The stock is down a further 4.6% today.
With the drop, is it time to buy miners?
The volatility in the mining sector remains high, and it looks like there are more losses to be realised before the industry begins to pick up. Until then, it is worth investing your hard-earned money elsewhere.
Looking for a few solid ideas now? The Australian Financial Review says “good quality Australian shares that have a long history of paying dividends are a real alternative to a term deposit.” Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!
- Should you buy shares today?
- Rio’s golden makeover stalled
- Market wipeout: 2013 gains mostly erased
- Could these stocks make you rich?
Motley Fool contributor Ryan Newman does not own any of the companies mentioned in this article.