Aluminum Corp. of China Ltd. (ACH), or Chalco, shares traded in Hong Kong bucked broad gains in commodities prices to fall by the midday break Friday, after Rio Tinto Ltd. (RTP) terminated its planned US$19.5 billion alliance with the Chinese company's parent.

At the midday break, Chalco was down 1.7% at HK$8.09, outpacing the benchmark Hang Seng Index's 0.22% fall to 18,463. The stock has risen 125% since Feb. 1, when the deal was confirmed.

Analysts said the scrapped deal dashed investors' hopes for a secure supply of raw materials and an injection of aluminum assets from Aluminum Corp. of China, or Chinalco, which would boost its share price.

Rio Tinto said Friday morning it will terminate what would have been China's biggest ever overseas investment amid strong opposition from investors and Australian politicians.

Instead, the Anglo-Australian miner will pursue a US$15.2 billion rights issue and enter into an iron ore joint venture with BHP Billiton Ltd. (BHP).

Macquarie Capital Securities analyst Andrew Dale said there is market talk about asset sales from Chinalco, which had planned to have strategic holdings in both iron ore and aluminum assets with Rio Tinto.

"We have always said that while this was a possibility, it was complicated and asset injections and benefits would take some time to be realized," Dale said, adding the outlook for Chalco is relatively poor.

Some analysts were more bullish about the commodity stock after base metals traded on the London Metal Exchange surged overnight, with aluminum gaining nearly 6% on the day to a four-week high.

"Still, commodity stocks are expected to be investors' favorites given growing optimism over global economic recovery, while commodity prices are also expected to gain support with the U.S. dollar expected to remain weak in the medium term," First Shanghai strategist Linus Yip said.

-By Jackie Cheung, Dow Jones Newswires; 852-2802-7002; jackie.cheung@dowjones.com