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How La Nina will create unexpected ASX stock winners and losers

2 street signs with winner and loser pointing in different directions ASX dogs
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The La Nina weather phenomenon will create several winners on the S&P/ASX 200 Index (Index:^AXJO). Some of these ASX stocks may not be what you expect.

La Nina will bring cooler than average temperatures to the east coast of Australia and is expected to last till March 2021.

This means we can expect summer to be a wetter than normal season. This is welcomed relief for shareholders of drought-stricken agri-stocks.

Unexpected ASX stocks affected by La Nina

But these aren’t the only ASX stocks affected from the La Nina weather phenomenon. Macquarie Group Ltd (ASX: MQG) identified 49 ASX stocks that will be impacted in both a good and negative way.

“Cooler than average temperatures are also typical across most of mainland Australia south of the tropics between Jul-Dec,” the broker.

“South East Asia also typically experiences higher than average rainfall. Conversely, drier than normal weather can be experienced in Argentina and southeastern China.

“La Niña can also bring drier and warmer conditions to the southern tier of the United States.”

The ASX miners that may benefit from La Nina tailwind

Among the winners outside of the agriculture sector include the BHP Group Ltd (ASX: BHP) share price and Rio Tinto Limited (ASX: RIO) share price.

This is because La Nina will bring heavier rainfall to Brazil and that could impede production at iron ore miner Vale SA. The Brazilian miner is already struggling to meet production targets due to COVID‐19, much to the benefit of Australia miners.

Our iron ore majors operate on the west coast of Australia, which won’t be affected by the wetter conditions.

If Vale’s operations are further impacted by La Nina, it won’t only be BHP’s and Rio Tinto’s shareholders that will be smiling. The Fortescue Metals Group Limited (ASX: FMG) share price and Mount Gibson Iron Limited (ASX: MGX) share price are also set to benefit.

Cold weather beneficiaries

We can also expect to see winners emerge in the ASX energy sector, according to Macquarie. Of course, this assumes their operations aren’t affected by floods.

“A colder winter will increase North Asia LNG demand,” explained the broker.

“And a cooler Aussie summer means less work for heat exchangers and therefore tends to drive higher efficiency rates in LNG liquefaction facilities.”

The winners in this instance include the Oil Search Limited (ASX: OSH) share price, Santos Ltd (ASX: STO) share price and Woodside Petroleum Limited (ASX: WPL) share price.

Washed up by La Nina

However, La Nina may also create losers on our market. One group are companies that supply or sell beverages here as cooler weather lowers demand for soft drinks and bottled water.

On that front, the Coca-Cola Amatil Ltd (ASX: CCL) share price, the Orora Ltd (ASX: ORA) share price and Ampol Ltd (ASX: ALD) share price could suffer.

Luckily for CCL shareholders, the takeover offer for the group will negate this risk (assuming the deal goes through).

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Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited and Rio Tinto Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. 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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