Top Australian shares to watch

Australia's macroeconomy

Australian inflation remains a core problem, and increases in the cost of borrowing will continue to put pressure on the economy. Key potential pressure points include overleveraged mortgage borrowers, the potential for bad bank loans, and the slowdown of the Chinese economy, which is by far Australia’s largest two-way trading partner.

Inflation globally has proved far stickier than many analysts had expected, so investors may wish to be careful with their assumptions. Inflation, like a weed, has a habit of coming back if monetary policy is loosened before completely under control.

But with sunnier times perhaps ahead, here are five top ASX stocks to consider this quarter.

Top Australian shares to watch

The following five shares represent some of the largest companies on the ASX. The stocks are listed by market cap, from largest to smallest. Although the final stock has a considerably lower market cap than the others, it’s worth keeping an eye on, as it has attracted significant investor interest.

1. Commonwealth Bank of Australia (ASX: CBAPJ)
2. BHP Group Ltd (ASX: BHP)
3. Rio Tinto Ltd (ASX: RIO)
4. CSL (ASX: CSL)
5. National Australia Bank (ASX: NABPH)

Commonwealth Bank of Australia (ASX: CBAPJ)

Commonwealth Bank is Australia’s largest bank – and together with National Australia Bank, Westpac, and ANZ – constitutes one of the ‘Big Four’ of the ASX 200. It generates most of its revenue from lending to homebuyers through mortgages and businesses.

Known for its robust digital banking platform and customer-centric approach, CommBank stands out in the competitive landscape of Australian banking. The bank’s innovative solutions and extensive branch network ensure it meets the diverse needs of its customers, from personal banking to complex financial advisory services.

Its strong financial performance, underpinned by a low cost-to-income ratio and a solid capital position, makes Commonwealth Bank particularly successful. The bank’s consistent dividend growth and resilience in economic downturns make it a favourite among investors seeking reliable returns, while its commitment to sustainability and community support enhances its reputation and investor appeal. Commonwealth Bank’s proven track record and strategic initiatives make it a compelling choice for those looking at the best Australian shares.

Commonwealth Bank of Australia has a market capitalisation of $230.86 billion.

BHP Group (ASX: BHP)

BHP is the largest mining company in the world based on market capitalisation and is usually the largest company on the ASX 200, accounting for circa 10% of the country’s share market.

The corporation generates over half of its profits from selling iron ore, predominantly to China, but it also sells copper, nickel, potash, and coal.

The company is a global operator with mines across Australia, the United States, Canada, Chile, Peru, Brazil, and Columbia; this variation across jurisdictions and minerals can be compelling for investors who value diversification. And despite the threat of slowing Chinese economic activity, BHP is actively engaging in asset acquisition, including recently buying up copper junior Oz Minerals.

The company’s proactive approach to market changes and investments in future growth areas, such as renewable energy and technology, make it an attractive option for investors. BHP’s solid performance, diverse portfolio, and innovative strategies make it a standout choice for those considering Australian shares to buy.

BHP Group Bank has a market capitalisation of $219.63 billion.

Rio Tinto Ltd (ASX: RIO)

Rio Tinto Ltd is a global mining and metals company with a strong presence in Australia and operations spanning over 35 countries. The company explores, mines, and processes essential minerals such as iron ore, aluminium, copper, and diamonds. The company’s commitment to sustainable mining practices and innovation has solidified its position as a leader in the industry.

Rio Tinto’s rich history dates back to 1873, when it was founded to mine the ancient Rio Tinto copper mines in Huelva, Spain. Over the years, the company expanded through strategic acquisitions and mergers, growing into a global mining powerhouse. By the mid-20th century, it had diversified its operations across various continents, including significant ventures in Australia, North America, and Africa. Today, the organisation is renowned for its innovation in mining technology and maintains a strong global presence.

The company’s success is driven by its high-quality asset base, efficient operations, and strategic investments in technology and sustainability. Rio Tinto’s ability to adapt to market demands and its focus on long-term value creation make it an attractive option for investors. Rio Tinto’s robust performance, diversified portfolio, and commitment to responsible resource extraction make it a compelling choice for those considering top Australian stocks to add to their portfolio.

Rio Tinto has a market capitalisation of $200.85 billion.

CSL

CSL is Australia’s largest biotech company and has been operating for over a century. With the combined capability of CSL Behring, CSL Plasma, CSL Seqirus and CSL Vifor, CSL’s offerings are more diverse than ever – making it a popular choice for differentiated ASX investors.

Founded in 1916 as Commonwealth Serum Laboratories, CSL was initially a government body focused on vaccine production. It was privatised in 1994 and has since grown into a global powerhouse through strategic acquisitions and continuous innovation.

CSL boasts a dynamic portfolio of lifesaving medicines, including those that treat haemophilia and immune deficiencies. The company operates across three sectors; rare and serious diseases; influenza vaccines; and iron deficiency and nephrology. For those considering top Australian shares to buy, the company's size can be attractive given the expense of clinical trials for new treatments, as is its multi-focused business plan.

CSL has a market capitalisation of $140.57B billion.

National Australia Bank (ASX: NABPH)

National Australia Bank (NAB) is one of Australia’s largest financial institutions, offering various banking and financial services. The bank operates through several segments, including Business and Private Banking, Personal Banking, Corporate and Institutional Banking, and New Zealand Banking. NAB is known for its strong focus on business banking – holding the largest share of business loans among Australia’s major banks. Its comprehensive suite of services includes transaction accounts, savings accounts, loans, insurance, and investment products.

Founded in 1834, NAB has a long history of supporting Australian businesses and communities. The bank’s success is driven by its robust financial performance, strategic focus on customer service, and commitment to innovation. NAB’s strong balance sheet and high credit ratings provide a solid foundation for growth, making it an attractive option for investors seeking stable returns. For those looking at top Australian stocks to invest in, NAB’s consistent performance, extensive service offerings, and historical significance make it a noteworthy choice.

National Australia Bank has a market capitalisation of $118.11 billion.

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