Top broker Macquarie says a "bear market rally" may have already started following yesterday's "dovish" interest rate increase along with weak US ISM Manufacturing data.
The S&P/ASX 200 (ASX: XJO) is up 1.56% at the time of writing after closing 3.75% higher yesterday.
That was the index's best performance in more than two years. Translation: The market loved the Reserve Bank of Australia's decision to raise rates by only 0.25% — not the 0.5% that the market expected.
Top broker names ASX 200 shares poised to outperform
In The Australian today, Macquarie's Australian equity strategist Matthew Brooks said a number of top 100 shares would likely outperform in a bear market rally.
The shares include ASX gold mining stocks and Australian real estate investment trusts (REITs).
The broker says these ASX 200 shares are the furthest below their long-term trend and are rated outperform.
- Newcrest Mining Ltd (ASX: NCM) — share price down 26% year to date
- Evolution Mining Ltd (ASX: EVN) — share price down 48% year to date
- Goodman Group (ASX: GMG) — share price down 35% year to date
- Dexus Property Group (ASX: DXS) — share price down 28% year to date
- GPT Group (ASX: GPT) — share price down 26% year to date
- James Hardie Industries plc (ASX: JHX) — share price down 39% year to date
- Ramsay Health Care Limited (ASX: RHC) — share price down 20% year to date
- ASX Ltd (ASX: ASX) — share price down 21% year to date
- ARB Corporation Limited (ASX: ARB) — share price down 46% year to date
- Reliance Worldwide Corporation Ltd (ASX: RWC) — share price down 44% year to date.
Brooks said:
We think these stocks are more likely to outperform in a bear market rally.
In terms of stocks that may lag, A2 Milk Company Ltd (ASX: A2M) is rated underperform, while Woodside Energy Group Ltd (ASX: WDS), Medibank Private Ltd (ASX: MPL), Brambles Limited (ASX: BXB), WiseTech Global Ltd (ASX: WTC) and Altium Limited (ASX: ALU) are rated neutral.
