The ASX's top performing shares for July

If you are keeping your money in cash, you would have missed out on one of the best sharemarket runs in the past five years.

In July, the ASX 200 jumped 6.3% and was only eclipsed by the Japanese market, the Nikkei, which leapt 6.4. If you had $100,000 invested in the ASX 200, you would have made $6300.

After a lacklustre 2015-16 financial year, with the Australian market falling by 4% (or rising by 0.5% after dividends are factored in), July's strong gain was a welcome surprise for shareholders.

Every sector in the top 200 companies rose in July, with consumer discretionary going up 8.8% and consumer staples 8.5%, outperforming materials (up 7.8%), industrials (6.9%), healthcare (6.8%), utilities (6.6%) and resources (6.5%).

The top performing shares over the month were Whitehaven Coal (up 56.7%), Monadelphous (41.2%), Bluescope Steel (32.7%), Western Areas (27%) and Fortescue Metals (26.6%). The worst were Asaleo Care (-35.2%), Syrah Resources (-23.6%), CIMIC (-18.2%), iSentia (-9.5%) and Beach Energy (-9%).

"This made July one of the best performing months in recent times," says Kevin Hua, co-founder and portfolio manager of global investment manager AtlasTrend.

"However, we believe there may be some pause in August as investors absorb the current earnings season. This is particularly the case as the current Australian market valuations do not appear cheap compared to many other markets globally."

Base metals rallied over the month: nickel was up 12.6%, zinc 6.7%, tin 4.5%, copper 1.6% and lead 1.5%. Iron ore traded up 5.3% at $58.6 a tonne and gold rose 2.2% to $1351 an ounce.

There were mixed economic signals, with headline inflation falling to 1% over the year to the end of June. Domestic holiday travel and accommodation fell by 3.7% in the quarter, motor vehicles slid 1.3% and telecommunication equipment and services dropped by 1.5%.

Retail sales increased by 0.2% in May. Building approvals fell 5.2%, led by a sharp contraction (-11.3%) in high-density approvals.

July's top performing shares for July 2016

Source: JP Morgan

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