Why is the Rio Tinto share price rebounding strongly on Thursday?

mining worker making excited fists and looking excited

mining worker making excited fists and looking excited

It’s been a very pleasing day on the whole for the S&P/ASX 200 Index (ASX: XJO). After some heavy losses earlier in the week, the ASX 200 is rebounding strongly today, up 0.95% at the time of writing to around 7,330 points. But it’s been an even better day for the Rio Tinto Limited (ASX: RIO) share price. Rio shares are currently up a healthy 2.34% at $111.51 each. That comes after some steep selling earlier this week.

So why are Rio shares surging higher today?

Well, we can’t be completely certain. The company hasn’t released any news itself today. However, looking at the market, we can take a guess. The materials and metals and mining indexes on the ASX 200 are the top two performing sectors so far today. So Rio is certainly not alone in its gains. Its peers like BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) are also surging, both up even more than Rio. Fortescue’s shares have risen an eye-popping 5.82%.

Rio share price rises amid higher iron ore price, falling dollar

These moves come as the iron ore price sees a rebound. According to Trading Economics, iron ore rallied overnight to US$137 a tonne. The Aussie dollar has also fallen in recent days. It’s now at just over 71 US cents, down from over 72 earlier n the week. A falling dollar makes exports from Australia cheaper to buy for foreign buyers, which is good news for miners like Rio.

So a rising iron ore price, and a falling Aussie dollar is the likely reason why iron ore miners like Rio, BHP and Fortescue are rallying today. This is no doubt coming as a relief for Rio investors, who had to watch the company lose around 4% of its value over Tuesday and Wednesday’s trading.

At the current Rio Tinto share price, this ASX 200 mining giant has a market capitalisation of $40.44 billion, with a trailing dividend yield of 9.75%.

The post Why is the Rio Tinto share price rebounding strongly on Thursday? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Rio Tinto right now?

Before you consider Rio Tinto, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Rio Tinto wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

More reading

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/AZjtNoQ

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s