Why is the Rio Tinto share price trailing the ASX 200 on Monday?

The Rio Tinto share is falling along with its peers in the materials sector on Monday.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points
  • Rio Tinto announced a complication with its Turquoise Hill acquisition last week, which could be affecting its share price today
  • The miner terminated its contracts with two of the company's minority shareholders, potentially making its takeover bid more difficult
  • On a broader level, materials is one of the worst-performing sectors this afternoon

The Rio Tinto Limited (ASX: RIO) share price is struggling today, down 2.54% in afternoon trade.

Shares in the mining giant currently trade for $103.68 each.

By comparison, the S&P/ASX 200 Index (ASX: XJO) is having a much better start to the week at just a 0.27% loss for the day so far.

So why is Rio Tinto struggling to keep up with the ASX 200 on Monday? Let's take a look at what's happening.

A man sits uncomfortably at his laptop computer in an outdoor location at a table with trees in the background as he clutches the back of his neck with a wincing look on his face.

Image source: Getty Images

What's going on with the Rio Tinto share price?

There's no news from Rio Tinto this morning to justify its shares slipping into the red. But some negative momentum could be carrying over from last week to put pressure on its valuation.

Last Friday Rio Tinto announced a snag in its deal to acquire Turquoise Hill Resources. This came in the form of ending its agreements with Turquoise Hill minority shareholders Pentwater Capital Management and SailingStone Capital Partners.

The agreements were terminated due to concerns raised by the shareholders over dissent and dispute resolution provisions found in their contracts.

These shareholders previously said they would use their dissent rights and withhold their votes to more easily allow Rio Tinto to acquire a 49% stake in Turquoise Hill's business. Without their support, it may make it more difficult for the company to smoothly proceed with its acquisition, along with putting some negative sentiment on its share price.

The materials sector is struggling

The underperformance of the materials sector could also be helping to drag the Rio Tinto share behind the broader market in today's trading session.

This is reflected in the S&P/ASX 200 Materials Index (ASX: XMJ) being down 1.65%. That puts it down the bottom with the worst-performing sector indices since market open today.

Some other notable ASX materials shares taking a beating include Fortescue Metals Group Limited (ASX: FMG), which is down 3.8%. Meanwhile, BHP Group Ltd (ASX: BHP) is slipping 2.2% this afternoon.

Thus Rio Tinto could be falling behind the ASX 200 due to macro as well as company-specific factors on Monday.

Rio Tinto share price snapshot

The Rio Tinto share price is up 3.57% year to date. While the S&P/ASX 200 Index is doing far worse at a 4.2% loss for the same period.

The company's market capitalisation is around $39.4 billion.

Motley Fool contributor Matthew Farley 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 Scott Phillips.

More on Resources Shares

A financial expert or broker looks worried as he checks out a graph showing market volatility.
Resources Shares

2 ASX 200 mining shares this fund manager is backing for long-term growth

Blackwattle is invested in the ASX 200's largest diversified miner and its biggest lithium producer.

Read more »

Two mining workers on a laptop at a mine site.
Resources Shares

Buying ASX 200 mining shares? Here's how Rio Tinto, Fortescue and BHP stacked up in March

Buying Rio Tinto, Fortescue, or BHP shares? Here’s how the ASX mining stocks performed in March’s sinking market.

Read more »

Miner looking at a tablet.
Resources Shares

Why are shares in this ASX copper developer surging more than 45%?

A deal for a major funding package has been struck.

Read more »

Woman with gold nuggets on her hand.
Resources Shares

Northern Star Resources posts Q3 gold sales, on track for FY26

Northern Star Resources sold 381,000 ounces of gold in Q3 FY26, keeping its production guidance in sight.

Read more »

A group of people in suits and hard hats celebrate the rising share price with champagne.
Resources Shares

$7,500 invested in Rio Tinto shares 10 days ago is now worth…

The miner's shares crashed 15% in the first three weeks of March.

Read more »

An executive stands looking out a glass window over the city.
Resources Shares

Why this ASX 200 stock just jumped 5% on Wednesday

Perenti shares are up 5% after naming a new Chief Executive.

Read more »

Smiling miner.
Resources Shares

3 reasons why the Rio Tinto share price could be a buy

Let’s unearth why Rio Tinto could be an opportunity worth digging into.

Read more »

Two workers working with a large copper coil in a factory.
Resources Shares

Up more than 90% over the past year, analysts say this ASX copper stock can keep going

Canaccord Genuity says this is a copper stock to watch.

Read more »