China Weighs On The Base Metals
This morning, many of the leading base and industrial metal stocks are declining lower at the start of the trading session. This important sector is highly affected by the Chinese economy and stock market. Last night, the important Shanghai Index finished lower by 3.67 percent. The decline occurred after the Chinese government announced a new 20 percent tax on any home that is sold. Remember, higher taxes are always a negative for markets.
One of the leading base metal stocks is Rio Tinto plc (ADR) (NYSE:RIO). Today, RIO is trading lower by $1.68 to $50.06 a share. Short term traders should watch for intra-day support around the $50.00, and $48.83 levels. The daily chart for RIO shows good support around the $47.00 level which is gap fill from late November 2012.
Some other leading base and industrial stocks that are also coming under selling pressure today include BHP Billiton Limited (ADR) (NYSE:BHP), Vale SA (ADR) (NYSE:VALE), and Teck Resources Ltd (USA) (NYSE:TCK). Traders should remember that the action in the U.S. Dollar Index will also impact these stocks from day to day.