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Market: LSE, NYSE, ASX
Sector: General Mining
EPIC: RIO
Latest Price: 2,800.50p  (-0.28% Descending)
52-week High: 3,838.00p
52-week Low: 2,633.00p
Market Cap: 39,554.04M
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Deal RIO Tax Free*
*subject to change and depends on individual circumstances.
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Rio Tinto
www.riotinto.com
Deal Rio Tinto Tax Free* Losses can exceed
your initial deposit *subject to change and depends on individual circumstances.

Rio Tinto is a leading international mining group that finds, mines and processes the earth's mineral resources.

The Group's major products include aluminium, copper, diamonds, energy products, gold, industrial minerals (borates, titanium dioxide, salt and talc), and iron ore. Its activities span the world but are strongly...

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Investor nerves prompt highest net selling in mining sector for five years

April 23 2011, 8:54am Investors appear to be rapidly removing themselves from the sector and selling stock at a significant rate following what started this year as an optimistic January

The FTSE is approaching the levels not seen for two and a half years yet it seems investors are succumbing to the general jitters that are currently embracing the financial world.

Nowhere is this nervousness more apparent than in the mining sector where net selling is now at its highest level for five years, it has emerged.

Investors appear to be rapidly removing themselves from the sector and selling stock at a significant rate following what started this year as an optimistic January.

The mining sector has always been seen as a riskier option in terms of investment.

From the low in July last the sector has rapidly climbed, if in volatile fashion, by around 31 per cent.

The sector reached a high in late December 2011, but has since been hit by sporadic bouts of selling, the latest of which smacks more of a mass exodus from the sector.

Broker UBS highlighted this dramatic mining trend as it said the sell-off underlined the depth of investors’ caution.

Equities strategist Matthew Gilman said: "Miners have been seeing the highest outflows of any sector over the past month, with net selling now at its highest for five years.

"Our positioning data (mining makes up around 60 per cent of the materials sector) suggests investors are not overweight the sector.

"Perhaps it is time to see some flows return. We remain overweight the pan-European miners."

He added that investor sentiment was now more mixed after a changeable few months.

"Flows at a market level have turned more mixed, following extreme optimism in January and pessimism in March.

"But with the market now just 4 per cent off its two-and-a-half year high, investors appear relatively cautious – having been net buyers of defensives in five of the past six weeks."

Gilman added that this appetite for defensive stocks saw flows into telecoms hit their highest level since data tracking began in March 2006, but since then, enthusiasm had waned and net flows were now close to neutral.

"Investor interest in financial (stocks) has returned – both banks and diversified financials have seen flows rebound into net buying territory following recent bank rights issues and the ICB report in the UK," he went on.

The broker has added G4S (LON:GFS), Prudential (LON:PRU), Imperial Tobacco (LON:IMT) to its key calls list - a portfolio of UBS's highest-conviction ideas.

It has removed Rio Tinto (LON:RIO) and Ryanair (ISE:RYA) from this list but stressed that it maintained "buy" ratings on all five companies.

The removal simply reflects a lower degree of conviction in the stock, it said.

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