Mining stocks took a hit today after Goldman Sachs downgraded heavyweights in the sector due to a poor outlook on certain commodities.
In a broker's note, Goldman Sachs turned bearish on mining equities which have started to underperform after a strong 12 months.
"With the trajectory of commodity prices likely down, we believe that in the near term (at least until the demand outlook becomes clearer and commodities find a floor) equities will likely follow. To reflect this, we cut our target valuation multiples across our coverage."
BHP Billiton and Antofagasta were downgraded to sell due to a negative outlook for iron ore prices and near-term risks to the price of copper, causing shares to fall between one and two per cent earlier in the day.
Anglo American, which lost more than two per cent of its value in morning trading, was downgraded to neutral as the impact of Cyclone Debbie eases, causing coking coal prices to fall. Weak iron ore prices also contributed to Goldman Sachs' decision on Anglo.
Rival miner Glencore's shares have lifted more than one per cent as Goldman Sachs held it at a buy rating, arguing it has a stronger balance sheet due to asset sales and a favourable outlook for the commodities it produces.