Macquarie reveals ASX 200 shares 'more likely to outperform in a bear market rally'

The top broker has named 10 ASX shares likely to do best in the bear market rally that may have just started.

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Key points

  • Macquarie says a bear market rally might already be underway 
  • The brokerage firm has named 10 ASX shares likely to outperform in a bear market rally 
  • Macquarie also nominates A2 Milk as likely to underperform in a rally 

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.

Motley Fool contributor Bronwyn Allen has positions in James Hardie Industries plc, Macquarie Group Limited, and Woodside Petroleum Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Reliance Worldwide Corporation Limited, and WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool Australia has recommended A2 Milk, ARB Corporation Limited, Macquarie Group Limited, Ramsay Health Care Limited, and Reliance Worldwide Corporation Limited. 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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