Australian shares give up early gains as Rio Tinto slumps on Glencore talks

Australian shares gave up early gains on Friday to trade almost flat, as Rio Tinto fell more than 6% to lead index heavyweight mining stocks lower after the company confirmed buyout talks with Glencore.

The S&P/ASX 200 index was up 0.1% at 8,730.30, as of 2342 GMT, after rising as much as 0.5% earlier in the day.

It has fallen about 0.2% so far this week.

Shares of Rio Tinto fell as much as 6.6% to hit their lowest since December 19 after the company and its smaller peer Glencore confirmed that they were in early buyout talks that could potentially create the world’s largest mining company with a combined market value of nearly $207 billion.

Rio Tinto was the top loser on the benchmark stock index and on track its worst day since July 2022, if current losses held.

Miners shed 0.1%, although losses were cushioned by strong commodity prices. For the week, miners have risen 4%, set for their best week since late November.

Financials fell 0.5% on Friday, with the “Big Four” banks trading in negative territory.

The sub-index has declined more than 2.5% this week in what could be its biggest drop since late November.

Lending some support to the benchmark index, energy stocks gained 1.4% on the back of higher global oil prices.

Woodside Energy rose 2%, while once its takeover target Santos added 2.4%. Healthcare stocks climbed as much as 0.8% to touch their highest level since December 24.

For the week, the sector has risen 1% after five straight weeks of losses.

Elsewhere on the bourse, gold stocks gained 1.6%, with Evolution Mining up over 2%. In New Zealand, the benchmark S&P/NZX 50 index was largely unchanged at 13,717.7.