Yesterday’s trading saw shares of BHP Group Ltd [ASX:BHP] down 4.4% to $32.79 a share, after the company paid shareholders a fully franked special dividend of $1.43 per share, and the sale of its shale oil assets.
BHP’s current share price is $32.70.
Meanwhile on Thursday, the benchmark S&P/ASX200 index closed at 5795.3, up 0.29% or 17 points. For such a large blue chip to fall by more than 4% while the broader index recorded a slight rise, is a significant move.
For mining companies such as BHP, it can be tricky to pinpoint exactly what shares to buy and/or sell.
That’s why commodities expert and Markets & Money contributor, Jason Stevenson, has detailed 10 resource stocks to watch in 2019. You can read more about his analysis here (for free).
Markets hurt by BHP’s share price dive
The second half of 2018 saw commodity prices hit hard, only to pick back up in the final months of the year amid concern over trade tensions, as well as the US Federal Reserve Board’s monetary policies upsetting global markets.
These factors have been driving the Aussie market lower. James Tao, Media and Capital Markets Analyst at CommSec, said had it not been for BHP’s poor trading, along with other big companies such as Costa Group Holdings Ltd [ASX:CGC], then the markets would have finished higher.
‘You’ve got a number of factors behind that, the big factor is BHP, which is really weighing the most on the broader market,’ he added.
Markets have generally begun to pick up slightly this year, making BHP’s drag on the market all the more unusual.
BHP is trading ex-dividend today, which may explain the fall. But this can be good for investors, as when a stock such as BHP is trading lower it creates an opportunity for potential buyers to purchase shares at a discounted price.
What’s next for BHP in 2019?
Anytime we are talking about a company such as BHP, tensions from the looming trade war are never too far from discussion.
Today is no different, as many traders appear cautious, waiting for information about the US-China trade negotiations.
‘We’re now waiting for what the outcome will be, whether or not it will be something tangible, or if there will be any type of progress coming out the talks that will give markets inspiration,’ Mr Tao also said.
On that note, brave investors may want to keep an eye on tensions, while 2018 commodity price declines affect share prices.
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PS: Interested in mining stocks leading into 2019? Markets & Money resources analyst Jason Stevenson believes that your best opportunities lie in smaller, more speculative stocks that aren’t restricted to iron ore. The kind that could see massive share price moves from a single positive drill-hole result. For 10 of his favourite mining stocks on the Aussie market this year, download his free report ‘Top 10 Mining Stocks’ today.