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Ten of the top ASX stocks for June

Resource stocks and stocks subject to inelastic demand could be some of the best picks on the ASX in June amidst tension and uncertainty surrounding RBA monetary policy.

Source: Bloomberg

As the middle of 2023 fast approaches, the Australian stock market has become more jittery in response to the maintenance of hawkish monetary policy by the Reserve Bank of Australia (RBA).

RBA governor Philip Lowe is coming under increasing political pressure as a string of 11 rate hikes in the space of a year hits mortgage borrowers, yet inflation remains rampant.

Lowe is about to face questions from senators on Wednesday at an estimates committee hearing in Australia's Parliament House, six days before the RBA announces its next monetary policy move on 6 June.

The RBA caused shock and dismay for markets in May with a 25 basis point hike to 3.85%, after holding off on upward adjustments in April.

While concerns about RBA hawkishness abound, Australia's monetary authority cannot hike rates indefinitely and inflation has already started to ease, coming down to an annual rate of 7% for the first quarter of 2023 from a 32-year high of 7.8% in the December quarter of 2022.

Once the RBA brings an end to the current spate of rate hikes – or even starts to trim the cost of borrowing – there is a possibility that risk assets such as ASX-listed stocks could stage a rebound.

Certain stocks are likely to perform better in the near term – including energy and resource stocks that could receive a boost from the ongoing conflict in Ukraine, as well as companies subject to inelastic demand and are thus less affected by inflation.

Here is a list of ten of the top ten stocks for ASX investors in the month of June.

1. Pilbara Minerals (ASX: PLS)

2. Airtasker (ASX: ART)

3. Transurban Group (ASX: TCL)

4. Whitehaven Coal (ASX: WHC)

5. Santos (ASX: STO)

6. NexGen Energy (ASX: NXG)

7. IGO Ltd (ASX: IGO)

8. WiseTech Global Ltd (ASX: WTC)

9. Beach Energy Ltd (ASX: BPT)

10. Telstra (ASX: TLS)

1. Pilbara Minerals (ASX: PLS)

This lithium producer has posted a strong performance amidst breakneck inflation, rising nearly over 28% year-to-date and over 56% over the past year.

Pilbara could be well-positioned to enjoy sustainable growth over the long-term, given the importance of lithium as a key ingredient in batteries for new energy vehicles.

2. Airtasker (ASX: ART)

Airtasker is Australia's market leader for online marketplace local services, with a huge $600 billion total addressable market across Australia, the US and the UK.

ART also has considerable room for growth, with a gross marketplace volume of just $189.6 million in FY22, up 23.8% compared to FY21.

Given that people are always on the hunt for work or local services - perhaps even more so during periods of economic downturn, ART's share price could remain resilient even if rate hikes from the RBA persist.

3. Transurban Group (ASX: TCL)

Infrastructure giant Transurban develops and operates urban toll road networks throughout Australia, the United States and Canada. TCL's earnings could benefit from the geographic spread of its operations across affluent Anglosphere economies, as well as the inelastic nature of demand for road usage.

TCL recently announced that its FY23 distribution is expected to reach 58.0 cents per stapled security, representing a 41.5% increase compared to the dividend awarded for FY22.

4. Whitehaven Coal (ASX: WHC)

Whitehaven bills itself as a leading producer of premium-quality coal on Australian shores. While opposition to coal production in Australia has ramped up in recent years due to climate change concerns, it nonetheless remains a key export commodity given undiminished demand from the economic behemoth of China.

China still remains heavily dependent upon coal to fuel its economic growth, adding 198 GW of new coal-fired power plants in 2021 with another 260 GW in the pipeline, according to figures from E3G.

5. Santos (ASX: STO)

Energy producer Santos is a natural gas and natural gas liquids play, with exploration, development and production operations in Australia, Papua New Guinea and Timor.

88% of its reserves are natural gas and natural gas liquids, while around 25% of these reserves are situated in onshore Australia.

STO could benefit from the elevated price for LNG created by the war in Ukraine, which has disrupted supply from energy giant Russia.

6. NexGen Energy (ASX: NXG)

Uranium miner NexGen has sought to promote the notion of nuclear power as a form of clean energy that will help major economies combat climate change and reduce their carbon footprints. Its Rook I project is currently the largest development-stage project in Canada.

NXG could see long-term sustainable growth should the uptake of nuclear power emerge as a widely accepted alternative to traditional fossil fuels.

7. IGO Ltd (ASX: IGO)

Diversified metals miner is one of few ASX-listed lithium shares to actually produce lithium – a key material in the batteries that power the world's fast-growing electric car market.

IGO's share price recently received a boost from news of record quarterly profits for the first quarter of 2023. The company reported EBITDA of $533 million and NPAT of $412 million following a 30% increase in its share of net profit from the Tianqi Lithium Energy Australia lithium hydroxide operation (TLEA) joint venture.

8. WiseTech Global Ltd (ASX: WTC)

Logistics-software company WiseTech has seen strong growth since the start of 2023, with its share price posting a year-to-date rise of over 50%.

The company has seen 33% annual earnings growth over the past five years, as compared to an industry-wide average of 22.1%, according to a report from Simply Wall Street. In the past year, its earnings growth has lifted to 60.3%, as compared to an industry average of -6.7%.

WiseTech's flagship products could continue to see strong popularity given the highly interconnected nature of global supply chains in the modern era.

9. Beach Energy Ltd (ASX: BPT)

This South Australian oil and gas producer has multiple onshore and offshore projects in both New Zealand and Australia. It's a major supplier of gas to the eastern coast of Australia, where the country's population is heavily concentrated.

Oil and gas prices could remain high on the back of both the conflict in Ukraine and an eventual easing of monetary policy settings around the globe.

BPT is well-positioned to step up production levels, targeting first gas from its Waitsia Gas Plant by the end of 2023.

10. Telstra (ASX: TLS)

Telstra is one of Australia's most iconic listed companies, as the biggest telecommunications operator in the country and a provider of both mobile and fixed-line services for Internet and telephony.

Telstra's share price could remain robust given its blue-chip status, as well as the inelastic nature of demand for its services in the Internet era.

Morgans recently had Telstra on its best buys list, giving it a share price target of $4.70.

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This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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