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Rio Tinto’s H1 results tomorrow are likely to highlight similar trends to those already reported by sector peers.
Slowing economic growth (most notably from China, but also US and Europe) and weaker commodity prices will probably hit top-line growth, while rising costs dent margins.
Given the importance of iron ore (just announced big CAPEX boost to increase capacity by 25%), group performance will surely be watched by those monitoring the economic growth situation in China.
Recent production figures held up well over the last year, but sales lagged due to a “drop in global economic conditions and sentiment”.
As with all companies driven by macro-economic growth, updates on outlook will be closely scrutinised, especially for changes since the recent July Q2 production update.
After a recent rally of 14%, CFD & Spread Betting traders may be now be looking for positive results to maintain this trend with a break above resistance around £33 since May, or poor figures to usher shares back towards May-Aug support around £28.
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