Rio shares hit by Chinalco rumours

Shares in Rio Tinto Ltd are down amid rumours its biggest shareholder is selling down its stake in the global mining giant. Brokers and analysts were scrambling on Wednesday to determine whether there was any truth to speculation the Aluminium Corporation of China (Chinalco) would try to reduce its holdings in Rio Tinto. Earlier this year, Chinalco unsuccessfully sought to increase its 9.3 per cent stake in Rio Tinto to 18 per cent in a $US19.5 billion ($A21.22 billion) deal. Now it may be selling down. "The rumour is that Chinalco might be looking to sell part of, or all of, its stake in Rio Tinto," IG Markets research analyst Ben Potter said. "It has come from London overnight, it came from hedge funds mainly." He said the rumour was behind a fall in Rio Tinto's shares, which closed down 19 cents, or 0.26 per cent, on Wednesday, against a broader market rise. Analysts say such a move by Chinalco would cement heavy losses for the Chinese state-owned company, as it paid more then current prices for its stake. Neither Chinalco nor Rio Tinto would comment on the rumour. CMC Markets market analyst David Taylor said he had heard nothing that would confirm the claims. "No-one ever makes this stuff up, and it hits desks and spreads like wildfire," Mr Taylor said. "There is probably some truth to it, but like Chinese whispers the actual truth of the matter may be far from what we are hearing," he said.