Recession ASX stocks are back: Consider buying the dip this April

I think this is a great time to buy stocks.

A female executive smiles as she carries out business on her mobile phone.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The recent sell-off of ASX stocks because of US tariffs could be a great time to invest. If I could choose when to invest, I'd obviously choose to buy when share prices are lower. Prices don't drop for no reason – investors are concerned about a possible recession, or at least a slowing of global growth.  

With global trade between the US and China suddenly looking quite precarious, there are questions about what's going to happen next.

There are some sectors that have suffered through some pain, which could be 'buy-the-dip' ideas. Defensive ASX shares could also be good investments.

I'll run through some areas where I see opportunities.

Recession ASX stocks

Some businesses may be less vulnerable during this time because of their ability to generate consistent earnings throughout the coming period, whatever happens next.

I would describe these businesses as ones that provide essential products or services.

Telco Telstra Group Ltd (ASX: TLS), energy infrastructure business APA Group (ASX: APA), supermarket business Coles Group Ltd (ASX: COL) and investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) are some names that come to mind.

They may be resilient and reassuring investments to own during this uncertain time.

Interest rate-sensitive stocks

There are some businesses that have been harmed by higher interest rates, such as real estate investment trusts (REITs) and ASX retail shares.

While predictions aren't certain to come true, multiple economists are thinking that the Reserve Bank of Australia (RBA) will cut rates in May, with more cuts possible later this year.

If the RBA does reduce rates multiple times this year, I think the businesses harmed by high interest rates could be the ones that benefit the most.

I'm thinking of ASX stocks like Nick Scali Limited (ASX: NCK), Accent Group Ltd (ASX: AX1) Centuria Industrial REIT (ASX: CIP), Charter Hall Long WALE REIT (ASX: CLW), and Centuria Capital Group (ASX: CNI).

ASX mining stocks

One of the main buyers of resources globally is China, so any noticeable economic pain there could mean a hit to demand. However, if the Chinese economy is negatively impacted, I'd expect the Asian superpower to launch stimulus to support its different industries, which could then support commodity prices.

I believe declines for companies like BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO) and Sandfire Resources Ltd (ASX: SFR) are longer-term buying opportunities.

Hard-hit

Some ASX stocks have been sold off heavily during this period. While investor fears are understandable, I don't believe that the negatives of the trade war situation will last forever. Current declines could be a good time to be contrarian.

The ones that have seen some of the biggest declines could be contenders for a recovery, such as GQG Partners Inc (ASX: GQG) and Global X Fang+ ETF (ASX: FANG).

Motley Fool contributor Tristan Harrison has positions in Centuria Capital Group, Centuria Industrial REIT, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Apa Group, Coles Group, Telstra Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Accent Group, BHP Group, Gqg Partners, and Nick Scali. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Opinions

Two funeral workers with a laptop surrounded by cofins.
Opinions

2 exciting ASX 300 shares on sale right now

I’m bullish about these exciting businesses.

Read more »

A male investor wearing a white shirt and blue suit jacket sits at his desk looking at his laptop with his hands to his chin, waiting in anticipation.
Opinions

Is it time to buy these 2 beaten-up ASX shares in 2025?

These stocks have dropped this year. Are they some of the best opportunities on the ASX?

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Opinions

Too high? These 2 ASX shares might be due for a correction

These popular blue chips are looking dicey to me.

Read more »

A woman looks questioning as she puts a coin into a piggy bank.
Opinions

The ASX 200 is approaching its all-time high. Here's why I'm not buying shares

I'm not seeing what the broader market is.

Read more »

Warren Buffett
Opinions

Three ASX 200 shares Warren Buffett could buy

If Warren Buffett had to add three ASX shares to his portfolio, he would likely look at these three top…

Read more »

A young woman sits with her hand to her chin staring off to the side thinking about her investments.
Opinions

Could Soul Patts shares hit $50 in 2025?

This company jumped more than 16% yesterday.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Opinions

3 great lessons I learned being an owner of Brickworks shares

I’m going to take these lessons with me.

Read more »

A bricklayer peers over the top of a brick wall he is laying with a level measuring tool on top and looks critically at the work he is carrying out.
Opinions

The pros and cons of the Soul Patts and Brickworks merger

This is a big deal. What are the positives and negatives of the merger?

Read more »