The top performing shares on the ASX this week

By

The recent Federal Budget included a $23 billion investment plan titled A Future Made in Australia, aimed at bolstering domestic manufacturing and fast-tracking the nation's progress towards achieving net zero emissions.

Instead of delving into the intricate details of its broader impact on Australia, which will likely unfold over time, the question it raises for investors is which ASX-listed companies will benefit significantly from these transformative policies.

One I believe will benefit is IGO, which, if correct, will potentially make it an attractive buying opportunity.

asx market wrap

This is because the Budget has earmarked $13.7 billion for production tax incentives in critical minerals processing, which is great news for IGO, given its involvement in mining and processing crucial minerals like nickel and copper.

To further sweeten the deal, a significant portion of the Budget, approximately $19.7 billion, will target initiatives promoting renewable energy, including tax breaks for lithium-ion investments.

This aligns perfectly with IGO's joint venture with Tianqi Lithium Corporation, which specialises in lithium mining and refining, making the recent Budget announcement seem tailor-made for IGO.

Looking at the share price, despite IGO's prolonged market underperformance, characterised by a decline of more than 60% from its all-time high in November 2022, the recent Budget announcement has the potential to signify a turning point for this company.

The price of IGO appears to have stabilised at $7; therefore, I am keenly waiting to see signs of an upward movement in price.

More specifically, if the price can rise above $9, then it will be time to start taking this stock seriously. So keep a vigilant eye on IGO, as momentum may soon sway decisively to the buyers.

What are the best and worst-performing sectors this week?

The best-performing sectors include Consumer Discretionary, up more than 4%, followed by Healthcare and Real Estate, up just under 3%.

The worst-performing sectors include Energy, down more than 2%, followed by Industrials, down more than 0.5% and Utilities, which is up just under 1%.

The best-performing stocks in the ASX top 100 include Aristocrat Leisure, up more than 16% followed by Charter Hall, up more than 6% and Cochlear, up more than 5%.

The worst-performing stocks include Whitehaven Coal, down 5%, followed by BlueScope Steel and Arcadium Lithium, down more than 3%.

What's next for the Australian stock market?

This week, the All-Ordinaries index has risen strongly, trading up more than one and a half per cent as of writing.

This is great news, especially after last week's nice rise, as it showcases that the strength of buyers may be here for the longer term.

In my previous report, I highlighted the resurgence of buyer dominance was particularly evident after finding support at the critical 7800 level.

However, despite this support, uncertainty loomed, given that last week marked the first up week since late March.

So, with the continued momentum from buyers this week, it's becoming increasingly evident that we're on the brink of breaking the all-time high in the next week or so.

Additionally, while I previously entertained the possibility of a mid-year low in May or June, the current strength of buyer activity suggests otherwise. It's now more plausible that April marked our mid-year low, signalling a potential entry into the next bullish phase-a particularly thrilling prospect.

In light of this development, the crucial question arises: what lies ahead as we venture into uncharted territory?

While I've previously identified 8200 to 8400 as probable next targets for our market, it's imperative to closely monitor the reaction of the All Ords when it breaks the all-time high.

This will offer insights into the level of bullish sentiment that we can anticipate heading into the third quarter, which historically is a period marked by market declines, notably into September or October.

If the market breaks above the all-time high and maintains its strength beyond June, the next significant market falls will likely be postponed until September to November.

Therefore, if you haven't already prepared to seize the market opportunities that will present, now is the time, or you risk missing out on one of the few significant buying opportunities remaining this year.

Get stories like this in our newsletters.

Related Stories

Dale Gillham is chief investment analyst at Wealth Within Limited (AFSL 226347). He also serves as the head trainer at the Wealth Within Institute (RTO 21917). He has more than three decades of experience in the investment industry, and is the author of How to Beat the Managed Funds by 20%, Dale's qualifications include an Advanced Diploma and a Diploma of Share Trading and Investment. He co-hosts the Talking Wealth Podcast, and his work has appeared in The Australian Financial Review, New York Business Journal, Wall Street Select and more.