The Australian share market has continued its buoyant start to the year with a rise of 0.7 per cent.
The All Ordinaries index closed 33 points higher at 5,057, while the ASX 200 index also gained 33 points to finish at a four-and-a-half-year high of 5,037.
The company has blamed the loss on impairments of $13.9 billion relating mainly to its aluminium business and coal interests in Africa.
Rio says its underlying earnings were still $9 billion.
Some strong profit results also boosted the market; engineering services firm Downer EDI rose 7.8 per cent after reporting first-half net profit was up 11 per cent to $94 million.
Wesfarmers shares rose 1.2 per cent, while rival Woolworths closed steady.
Shares in department store chain David Jones fell 0.4 per cent though as the company reported a fall in sales.
David Jones in the three months to the end of January, to $590 million.
The company says it will now stop selling DVDs, music and computer games.
Rival Myer was also hurt by the news, with its stock falling 1.1 per cent.
About 5pm (AEDT), the Australian dollar was buying around 103.57 US cents, 77.03 euro cents, 66.7 British pence, 96.84 Japanese yen and 122.21 New Zealand cents.
Spot gold was selling for around $US1,645.25 an ounce, West Texas intermediate crude oil was worth around $US97.01 a barrel and Tapis crude in Singapore was fetching around $US125.17 a barrel.