china gdp fall final nail in bhp coffin

This is the sharp end of the stick for traders and base metals have a brand new reason for a sell off. Aus resource stocks are about to get hammered. I expect to see BHP sub 20$ in the next week or two. This following piece of news is the most important news for resource stocks in the past two months, and it came out worse than predicted by analysts. In other words, look out below!

"CHINA'S economic growth slowed more sharply than expected in the third quarter, which marked the fifth straight quarterly slowdown.

The latest figures from the National Bureau of Statistics came amid concerns about the global financial crisis hurting demand in the world's fourth-largest economy.

“The growth rate of the world economy has slowed down noticeably. There are more uncertain and volatile factors in the international economic climate,” bureau spokesman Li Xiaochao said.

“All these factors have started to release their negative impact on China's economy.”

China's economy grew 9.0 per cent in the third quarter from a year earlier, slower than the second quarter's 10.1 per cent gain. It was also lower than the median forecasts of 9.5 per cent in a Dow Jones Newswires survey of 11 economists. "

http://www.theaustralian.news.com.au/business/story/0,28124,24523511-643,00.html

Also if you look on SMH website in business section you'll see it's the slowest growth since 2005 in their article on it.

This news is so much more bearish than the financial crisis ever was specifically for resource stocks who are well capitalised and funded like BHP/RIO. We may see some serious pressure on the base metals similar to the deflation we've seen in the financial arena recently.

www.basemetals.com
www.kitcometals.com

NOTE: The title of this post (the coffin) refers to the short to medium term. I'm sure BHP will be back some time in a year or two, but for short term I'm increasingly bearish with this news.