Optimism for RIO short lived following the production numbers
Apologies for the late report we had technical difficulties earlier.
What Mattered Today
A weak session today with broad based selling pushing all sectors into the red. Initial optimism in the resource space following RIO Tinto’s Q4 production numbers was short lived and we saw a reversal into the close. We had a range of +/- 53 points, a high of 5748, a low of 5695 and a close of 5699, off -49pts or -0.85%. Volume was still low with less than $4bn going through the equity market.
ASX 200 Intra-Day Chart
ASX 200 Daily chart
In terms of production, RIO came in a tad ahead of expectations with Iron Ore from WA coming in at 87.7Mt, up 7% for the year – above the 86.8Mt expected. Others areas of the business performed strongly with the exception of Copper and Diamonds which were a slight miss. That prompted early buying and the stock traded higher during the morning session. From around 11.15am the stock lost momentum and dropped more than $1from its highs. The issue seems to be the average price achieved on RIO’s ore for the period. Some analysts were factoring in around ~56 /t while they came in around $53.60/t. That’s worth around +$900m or about 3% of group revenue. There is little doubt that RIO will deliver a strong full year result on the 8th February when they report, but the stock has now run hard and this optimism may well be built in.
Rio Tinto (RIO) Daily Chart
Sectors
ASX 200 Movers
What Matters Overseas
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