As the S&P/ASX 200 Index (ASX: XJO) creeps back into the realm of negatives this afternoon, it's worth taking a look at which shares are pulling it down the most. Upon inspection, we can see that both the Rio Tinto Ltd (ASX: RIO) share price and the Fortescue Metals Group Ltd (ASX: FMG) share price are in the bottom three of the top 200. Nufarm Ltd (ASX: NUF) is currently sitting squarely in the middle to complete the red trifecta.
Given there's no news out from Nufarm, potentially shareholders are taking some profits after the recent run-up. In contrast, there's plenty to talk about from Rio and Fortescue.
So, why are these shares hit the hardest today?
Iron ore raining on the parade
For the Rio Tinto and Fortescue share price, last night's sudden iron ore price drop would be the culprit. The steel-producing commodity's price began to dwindle early yesterday morning. However, around 5 pm AEDT futures sank like a dead weight, tumbling by nearly 8% in less than an hour.
Iron ore futures have recovered somewhat, but the commodity price remains roughly 8% below its price 2 days ago.
Fate loves irony, as Elon Musk would say
Ironically, this jolt came just hours after Fortescue CEO, Elizabeth Gaines, discussed the industry landscape at the AFR's Business Summit. When Gaines was pressed on whether iron ore was resistant to China's tactics, she responded, "We've never been complacent. We actually work very hard to maintain strong relationships, but it isn't as simple as saying Australian companies should just diversify."
Gaines noted that there is more room for political diplomacy in order to foster working relationships between Australia and China.
At the time of writing, the Rio Tinto share price is down 3.6% to $116.81. Meanwhile, Fortescue has sunk 6.3% to $20.79.
Recent events for the Rio Tinto share price
The pullback in the Rio Tinto share price comes 6 days after the mining giant went ex-dividend. Some shareholders wanting to grab their last dividends may still be making a dash for the exit today.
Rio will pay a final dividend of $5.171 to eligible shareholders.
Another ironic factor, Macquarie recently upgraded its price target on Rio Tinto. The broker expects improved copper prices should assist Rio to hit its new price target of $142 per share.
