Top 5 Best Australian Stocks to Watch 2024

Australia is also known for its mining and agriculture.

Mining is one of the most important sectors in the Australian economy as the country is blessed with mineral wealth.

To give a general perspective of how big mining is in Australia, the country is the world’s largest producer of iron ore and bauxite, the second-largest producer of gold, manganese, and lead, and the third-largest producer of cobalt, zinc, and uranium. 

One would probably have recognized how important all of these minerals are for industries around the world and especially for the transition to electric-driven mobility. 

Therefore, certain Australian stocks will likely be on the radar of many investors and traders.

The current geopolitical situation and the high inflation all add to the dynamics of the Australian stock market. 

In this article, we will discuss the top 5 best Australian stocks to watch in 2024.

Best Australian Stocks to Watch: Introduction 

In the current environment of the beginning of 2024, the number one metric that everyone seems to be looking at is inflation.

In Australia, the most recent inflation number came in at 7.8%. That is much higher than the Australian reserve bank’s target of 2-3%. 

Unemployment was reported to be around 3.5% and the last time it was at such low levels was in 1974.

Labour participation is also high and the share of working-age Australians with a job is at an all-time high.

The Australian central bank attributes this strong labour market to stimulus measures undertaken during the pandemic which boosted demand and led to job creation. 

The Australian economy is impacted significantly by its exports.

So, economic recovery in China, higher demand from India, and the overall economic situation in the global economy will play a role in how the Australian economy performs in 2024.

The trajectory of interest rates will also be important as very high interest rates could lead to unemployment and a slowdown. 

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What is the ASX? 

The ASX is the Australian Stock Exchange. It is based in Sydney and is counted as one of the top stock exchanges globally. The ASX operates from Monday to Friday and is closed on public holidays. The ASX, oftentimes, is also a term used to refer to the ASX 200 index.

As traders, we should therefore be aware that the ASX could either refer to the stock exchange that is the primary exchange for publicly listed companies in Australia or it could refer to the most widely followed Australian stock index which is the ASX 200. 

As the name suggests, the ASX 200 is a market-capitalization-weighted and float-adjusted index that comprises the 200 largest public companies in Australia.

The idea behind using a float-adjusted index is to include securities that are most tradeable. 

Australian Stock Themes to Watch 2024 

As mentioned above, inflation has risen in Australia and worldwide.

From close to 2% before the pandemic, the most recent inflation number is at 7.8%. It is up almost 4X. The interest rates have also gone up from close to 0% during the pandemic to 3.6%. 

While commodity prices have cooled down to some extent, inflation is still well above the Australian central bank’s target. 

While high commodity prices are not a bad thing for a commodity-exporting country like Australia, persistently high interest rates start eating into household budgets.

The share of the income going towards mortgage payments goes up, financing for companies becomes difficult, and the overall demand dynamics in the economy start getting impacted. 

High interest rates for a long time can cause a recession. This does not seem to be the case right now in Australia as the job market is strong and labor participation is at a high. However, high inflation and interest rates can reverse that situation. 

There is a feeling that the spike in consumer spending post the pandemic is going to wane. Combined with high interest rates, there could be headwinds for the economy.

So, 2024 could very well be the year of value investing. Technology and growth stocks have been taking a beating the world over. 

Meanwhile, commodity prices could remain strong due to the growth of India and China. Additionally, there is growing demand from the electric vehicle sector. 

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Top 5 Best Australian Stocks to Watch 2024 

With the macroeconomic situation laid out and the overall environment in which the Australian economy is clarified, let us now look at the top 5 best Australian stocks to watch in 2024.

This list is subjective based on the opinions of the author, please consider that the requirements of each individual investor are different. 

1. Whitehaven Coal Ltd 

Australia is the second-largest exporter of coal in the world and Whitehaven Coal Ltd is a leading producer of premium-quality coal. It trades on the ASX under the ticker symbol WHC and has a market capitalization of A$5.9 billion (AUD). 

• Whitehaven Coal benefits from being the most dominant business in Australia’s only high-quality coal basin.
• Its business is driven by the huge demand for coal from Asian economies like India and China. The future outlook of India and China appears to be bright and the two countries are expected to continue and even grow their coal consumption for years to come. 
• Whitehaven Coal, however, faces challenges due to the rising incorporation of ESG principles in investment decisions. Countries around the world are also making climate-based pledges that involve discouraging the use of fossil fuels like coal. 
• Additionally, if countries like India and China decide to speed up a transition away from coal, then that could also become a problem for Whitehaven Coal.

You can trade the Whitehaven Coal Ltd Contract for Difference (CFD) with Admirals or invest in shares with us.

2. South32 Ltd 

South32 is a mining company based out of Perth, Australia. It was established as a result of a spin-off from mining major BHP Billiton. South32 is listed on the ASX and it also has secondary listings in London and South Africa. Its market capitalization is A$18.2 billion. 

• South32 produces a range of commodities like bauxite, aluminium, manganese, nickel, and copper. The advantage for South32 is that there is currently robust demand for these commodities. And this demand isn’t expected to subside anytime soon due to the revolution happening in the electric vehicle space. 
• Secondly, South32 also benefits from geographical diversity. It has invested in mines in Australia, South Africa, and South America. 
• Having geographical diversity also exposes South32 to political and geopolitical uncertainties. Any adverse developments in South Africa or South America, local labour issues, or currency price movements can potentially affect South32. 
• Additionally, South32 also has to constantly adapt its business to climate-related policies. Any drastic change in government policies or any lack of sustainability initiatives from the company could lead to a lower ESG score by rating companies. 

It's possible to trade the South32 Ltd CFD with us or invest in the company's shares.

3. WiseTech Global Ltd 

If commodities are being exported, one needs to have strong logistics to make the whole operation efficient.

WiseTech Global is one of Australia’s leading providers of software to the logistics industry. Companies like DHL, Kuehne + Nagel, UPS, and Toll Group are customers of WiseTech Global. The stock has a market capitalization of A$20.5 billion. 

• The pandemic has placed greater emphasis on transparency and visibility in supply chains. This can be achieved through technology and companies like WiseTech Global are well-placed to benefit. 
• Additionally, a shift towards automation has created a demand from companies to automate their processes and reduce manual and repetitive labour tasks. WiseTech Global offers software solutions that automate key processes in logistics and freight forwarding. 
• A key risk for WiseTech is that of competition. The software space, even in logistics, is fiercely competitive and companies have to build durable moats to keep their footing. 
• Secondly, any slowdown in the global economy due to high interest rates and a resulting recession could significantly impact WiseTech Global as global trade can potentially take a hit in such a scenario. 

Start trading the WiseTech Global Ltd CFDs or directly invest in the company shares.

See the Daily fluctuations of the WiseTech Global Ltd stock via the TradingView widget, shown below:

 *Past performance is not representative of future results.

4. New Hope Corp Ltd 

New Hope Corp is a coal mining company. It not only explores, develops, and operates coal mines, but also operates a network of ports, railroads, and ships to distribute coal to its customers worldwide.

The company is listed on the ASX and has a market capitalization of A$4.5 billion. 

• New Hope Corp benefits from its downstream integration as it leverages synergies from having both the mining and logistics operations in-house. This allows the company to keep costs down. 
• New Hope Corp also places a lot of emphasis on selling to its customers via long-term contracts. This provides revenue visibility and a stable source of income for the company. 
• The key risk to investing in New Hope Corp is the fact that it deals in coal, a fossil fuel that isn’t popular in the age of ESG and net-zero emissions. 
• Secondly, because New Hope Corp’s business is so heavily skewed towards coal, any volatility in the price of coal has a direct impact on the price of the company’s stock. 

There is the option to trade the New Hope Corp Ltd CFD or invest in direct shares.

5. Lynas Corp Ltd 

You must have heard of rare earth elements as being critical to the global economy.

They are used to make electronic components, renewable energy equipment, consumer electronic devices, weapons, and medical equipment. Lynas Corp is the world’s second-largest producer of separated Rare Earth materials. It has a market capitalization of A$5.8 billion. 

• Rare earth elements are not very commonly found but the demand for them is huge. This isn’t going to change anytime soon. 
• Lynas Corp has expanded its production capacity and is the leading non-Chinese producer of rare earths, a major factor in a geopolitical environment where supply chains are moving away from China. 
• Since Lynas Corp deals in only one commodity, it is subject to the risks associated with rare earths. Price fluctuations in rare earth elements can significantly impact Lynas Corp. 
• Lynas also faces risk from regulators for operating its single and largest processing plant in Malaysia. In the past, it has faced regulatory issues in that country. 

Admirals has the option to trade the Lynas Corp Ltd CFD or invest in the shares directly,

Best Australian Stocks to Watch: Conclusion 

Is trading or investing in Australian stocks an option for you?

Only you can decide based on your risk management profile, which should be kept at the forefront of your investment and trading activity. 

Ideally, you now have a clearer image of how the Australian economy stands and what are some of the country’s most well-known stocks.

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INFORMATION ABOUT ANALYTICAL MATERIALS: 

The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admiral Markets investment firms operating under the Admiral Markets and Admirals trademarks (hereinafter “Admirals”). Before making any investment decisions please pay close attention to the following: 

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