The market is set to crash this morning. But those wanting to hunt for bargains may want to take a look at ASX stocks leveraged to the Victorian economy.
The S&P/ASX 200 Index (Index:^AXJO) is tipped to fall by 1% due to the overnight slump in US stocks and weak commodity prices.
The pull-back in the ASX is only likely to be temporary and may represent a bargain hunting opportunity.
Cheap ASX stocks cast into the Victorian bargain bin
One discount bin that is worth taking a look at is for ASX stocks hammered by the second Victorian shutdown.
The state is the worst performer in the country as strict COVID-19 lockdowns brought the Victorian economy to its knees.
Turnaround in Victoria is neigh
But the tide may be turning with Victoria recording 12 new cases in the last 24 hours, reported the Australian Broadcasting Corporation.
This takes the 14-day rolling average to 26.7 for greater Melbourne, while the average for regional Victoria falls to just 1.1.
The 14-day average is now below Premier Daniel Andrews’ target band of 30 to 50 cases. This is a condition for loosening stage four restrictions.
ASX stocks to buy for the Victorian recovery
Case numbers are falling faster than what the state government was forecasting. This is igniting hopes that the state will reopen its economy sooner rather than later.
Investor sentiment towards Victoria is set for a rebound! This might be a good time to look at stocks that can benefit the most from the recovery.
I am not necessarily talking about retailers with a large presence in the state. Stocks like the Wesfarmers Ltd (ASX: WES) share price and Nick Scali Limited (ASX: NCK) share price are already doing well as they have benefited from the COVID fallout.
Two ASX stocks on UBS’ buy list
It’s the laggards that are likely to jump the most as the Victorian economy reopens. One stock that fits into this category is the Crown Resorts Ltd (ASX: CWN) share price, according to UBS which rates it a “buy”.
The COVID-19 shutdown hit the casino operator’s Melbourne venue hard and there’s little good news priced into the stock.
However, the latest revelation that Crown was giving financial performance briefings to James Packer ahead of other shareholders could rattle the stock.
Another underachiever UBS thinks will see its fortunes turn with the Victorian economy is the Insurance Australia Group Ltd (ASX: IAG) share price.
Shares in the insurer are hovering around an eight-year low. Any good news could see the stock bounce like a coiled-up spring.
UBS is also recommending IAG as a “buy”.
The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Crown Resorts Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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