Insights

ASX 200 mining shares slump, dragging index into the red

A tough day it has been for the ASX 200 Resources sector…
The post ASX 200 mining shares slump, dragging index into the red appeared first on The Motley Fool Australia. –

Some of the ASX’s biggest mining shares are heading south following a trend reversal throughout the day.

The biggest company on the ASX by valuation, BHP Group Ltd (ASX: BHP), is currently down 0.43% to $47.46.

Likewise, Fortescue Metals Group Limited (ASX: FMG) is shedding 2.72% to $20.05, and Rio Tinto Limited (ASX: RIO) is dipping 0.61% to $111.17.

Ultimately, this has weighed on the S&P/ASX 200 Resources Index (ASX: XJR), which is falling 0.77% to 5,714.2 points.

What’s driving the ASX 200 mining shares lower?

There are a couple of reasons why the ASX 200 mining sector is trading in negative territory.

Firstly, the drop in iron ore prices over the past week is providing strong resistance to the resources industry.

Iron ore prices have sunk almost 5% since this time last Wednesday to trade at US$144.08 per tonne.

Furthermore, as COVID-19 continues to spread throughout China, there are fears that the government may enforce a wider lockdown.

It is expected that there will be a reduction in demand from Chinese steel mills in the next few months. This is because the construction sector has been heavily affected by the government’s strict zero-COVID policy.

The property and infrastructure industry comprises roughly 60% of China’s steel needs.

In addition to the ASX 200 mining sector weakness, the well-known phrase “sell in May and go away” could be playing a hand.

Historically, investors tend to offload their shares before tax time, leading to a broad underperformance across the market. Conversely, there is typically a rally after the end of the financial year, with July usually a strong month.

The post ASX 200 mining shares slump, dragging index into the red appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

More reading

After dropping 7% in a month, can the Rio Tinto share price stage a comeback in May?
Leading brokers name 3 ASX shares to sell today
Why is the Fortescue share price down 5% on Tuesday?
Here’s how some of the biggest ASX 200 shares are responding to the RBA’s rate rise
How did the Fortescue share price stack up in April?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US & HK* Trades. Click Here!