The ASX jumped 6.5% in the September quarter, marking the best quarter of the year so far, and the best September quarter since 2013.
The ASX has just delivered its best September quarter since 2013 - and this is a bigger deal than you might think.
Here’s the thing, no one’s expecting big things from the ASX in September.
It’s usually the weakest month on the stock market thanks to the United States.
September is the end of the financial year in the US, and it's when the bulk of tax-loss selling tends to happen.
We spoke about it here
But this year things have been different.
The ASX went from its typical September couch-potato vibes to a fully-fledged member of a run-club.
The ASX jumped 6.5% in the September quarter, which is the best quarter of the year so far, and the best September quarter since 2013.
Why did the ASX have its best September in over a decade?
One of the biggest reasons for this jump was the US Federal Reserve’s decision to deliver its first interest rate cut in four years at the beginning of September.
This decision put to bed a lot of fear about a US recession and gave investors a boost of confidence in the market.
For Aussie investors, the good news continued to roll in.
Last week the Chinese government announced a stimulus package to support the Chinese economy's recovery post-pandemic.
Given the close economic relations between Australia and China, a growing Chinese economy means a growing Australian economy.
The mining industry in particular benefited from this news, and top mining companies BHP, Rio Tinto, and Fortescue all saw their shares jump more than 13%.
Now, while the market on the whole was peaking, there are always going to be some stocks that outperform and top the charts
Let’s take a look at the 5 best performing stocks on the ASX in September 2024.
Mineral Resources or MinRes is a mining company based in Western Australia that largely mines lithium and iron ore.
Over the month of September, the share price of Mineral Resources went from $40.15 to $52.04 - a 29.6% jump over the month.
China’s stimulus package announcement played a big role in boosting the MinRes share price.
The Chinese government explicitly announced that it will be providing support to property developers and homeowners.
This is huge news for mining companies like MinRes, which produce iron ore that is used to produce construction materials like steel.
Over this year, the price of iron ore has dropped by over 35% due to weak demand from China - but now it looks like the tide could be turning for the mining companies.
At the moment, MinRes’ share price is still down 24% since this time last year, so we’re yet to see if MinRes is on the path to recovery or if this is just a temporary boost.
South32 Limited is another mining company based in Western Australia.
It was spun out of BHP back in 2015.South32 produces a range of commodities including nickel, coal, copper, silver, and lead.
Shares in South32 rose 20.1% over the month of September, despite the company not releasing any price-sensitive information over the month.
Like MinRes, South32 investors have reacted to the stimulus boost announcement from China, sending its share price soaring.
Commodity prices were also rising in the second half of September.
Pro medicus is a health imaging company that provides radiology software and services to hospitals and imaging centres.
This stock jumped a massive 18.3% over the month of September, and has gone up 113% since this time last year.
Weirdly, there was no major news that came out about Pro Medicus over September, experts reckon the stock jumped as a result of AI hype and the implications of this evolving technology on health tech companies like Pro Medicus.
Seeing a stock like this that’s jumped despite no major news is a reminder that investing is just as much about psychology and beliefs as it is about numbers.
Notice a pattern?
It’s clear that September has been extra kind to mining stocks.
But what’s also interesting to see is that none of the top-three stocks on the ASX last month actually released price sensitive information.
Their share price increased as a result of how investors reacted to broader economic news.
While investors do react to announcements by individual companies, it’s also important for them to take a macro lens and look at the decisions being made by other institutions and global powers, and understand the ripple effects of those decisions.
If you’d be interested in a monthly update on the top-performing stocks on the ASX200, let us know in the comments!
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