MENU

3 reasons why Rio Tinto Limited shares are soaring today

The S&P / ASX 200 Index (index: ^AXJO) (ASX: XJO) is set to post a good start to the trading week, up more than 0.5% in late afternoon trading. But that’s nothing compared to Rio Tinto Limited’s (ASX: RIO) gain. The giant iron ore miner has surged more than 2.5% to clear the $60 mark.

Here are three reasons why Rio’s shares are soaring…

1)      The iron ore price gained 1.5% to US$92.10 on Friday, while the LME 3-month copper price gained 1.4% to US$6,820 a tonne. Rio generates around 90% of profits from iron ore, and another 7% of total profit from copper.

2)      Rio’s shares have been sold off this year, losing 12% since the beginning of January. Some investors may have viewed the recent price as cheap and an opportunity to get set in the world’s second-largest iron ore miner, with one of the lowest production costs globally.

3)      An indicator of Chinese factory activity, the HSBC Flash PMI came in at 50.8 in June, up from 49.4 in May and higher than economists had expected. China is Rio’s largest customer, and increased productivity could indicate that demand for the company’s raw commodities is going to increase in the near future.

Rio isn’t the only stock showing strong gains today, BHP Billiton Limited (ASX: BHP) is also up 1.4%, Fortescue Metals Group Limited (ASX: FMG) has climbed 3.9% while iron ore junior BC Iron Limited (ASX: BCI) is up over 5% – all likely on the back of the iron ore price move and China data.

While RIO is not on our watchlist, there are three other resources stocks that could reward shareholders over the long term…

Motley Fool analysts have uncovered three companies poised to benefit from ongoing long-term demand for oil, copper and gold. Get our brand-new report -- "3 Small Resources Companies That Could Win Big". And it's all yours for FREE, no credit card needed!

Just click here to download the report for free today!

Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.