The war in Iran has inspired an unexpected ASX 200 market trend

S&P/ASX 200 Index (ASX: XJO) shares have tumbled 8.9% since the war in Iran broke out on 28 February (US time).

ASX 200 energy shares have surged 17%, while materials stocks — incorporating mining shares– have been the worst hit, down 19%.

While the broader market has fallen heavily this month, many investors have responded in a surprising way.

Exclusive data from online investment platform Stake implies that some investors are buying the dip.

The data reveals the 10 most traded ASX 200 shares on the platform between 2 March and 18 March.

The strongest hint that a buying-the-dip trend is afoot is that only one ASX 200 energy share is among the 10 most traded stocks.

That’s despite energy shares being the clear momentum trade this month.

Another strong hint is that several of the 10 most traded stocks have experienced significant declines over the past 12 months.

Perhaps some investors see long-term opportunity in these downtrodden stocks, some of which are trading at multi-year lows.

Prime examples include CSL Ltd (ASX: CSL), Zip Co Ltd (ASX: ZIP), Xero Ltd (ASX: XRO), and Wisetech Global Ltd (ASX: WTC).

Yesterday, we looked at the first five of the top 10 most traded ASX 200 shares since the war began.

Here, we reveal the ASX 200 shares ranking six to 10 in that group, and ponder why they’re among the most traded this month.

CSL Ltd (ASX: CSL)

The CSL share price closed at $139.39 yesterday, down 0.3%.

The market’s largest healthcare stock has been the sixth most traded ASX 200 share on the Stake platform this month.

Long considered an ASX 200 blue chip, CSL has been in a downward spiral since mid-2024.

CSL shares have fallen 5% since the war in Iran began, and hit an eight-year low of $133.35 this month.

The CSL share price is down 45% over 12 months.

Multiple macro issues, such as falling global vaccination rates and company-specific challenges, have profoundly impacted CSL’s valuation.

Northern Star Resources Ltd (ASX: NST)

The Northern Star Resources share price closed at $17.57 yesterday, up 2.1% for the day and down 2% over 12 months.

The gold stock has been the seventh most traded ASX 200 share on the Stake platform this month.

Northern Star shares have fallen 42% since the war began, although a second guidance downgrade from the miner contributed to the fall.

The 16% 30-day decline in the gold price has also contributed, as investors deleverage and US Treasury yields reach a 10-month high.

Many experts maintain ambitious forecasts for the gold price amid structural long-term tailwinds, primarily central bank buying.

PLS Group (ASX: PLS)

Formerly known as Pilbara Minerals, PLS Group is the market’s largest ASX 200 pure-play lithium share.

PLS closed at $4.54 per share yesterday, up 6.6%, making it the second-fastest riser of the ASX 200 on Tuesday.

So far in March, PLS shares have tumbled 12.5% amid lithium prices holding up fairly well during the Iran conflict.

The lithium carbonate price has fallen by only 3.6% over 30 days.

Lithium has a bright outlook given the green energy transition and resurgent demand for electric vehicles (EVs).

There is no dip to buy this stock at, which has risen 141% over 12 months.

As the eighth most traded ASX 200 share on the Stake platform this month, it’s likely investors are cashing in their gains.

Lynas Rare Earths (ASX: LYC)

The Lynas Rare Earths share price closed at $19.56 on Tuesday, up 3.2%.

The ASX rare earths share is vastly outperforming its peers in the materials sector this month.

The Lynas share price has increased 3.1% since 28 February, and is up 172% over 12 months.

Strong interest in critical minerals and positive company news appear to have insulated Lynas shares from the broader market downturn.

Lynas announced the extension of a Japanese offtake agreement to 2038, and first production of samarium oxide at its Malaysia site.

Experts say the next mining boom will centre on critical materials with industrial applications tied to electrification and energy security.

Xero Ltd (ASX: XRO)

The Xero share price finished at $74.95 yesterday, down 2.2% for the day and down 54% over six months amid the broader tech downturn.

Xero shares have been smashed due to fears about AI’s potential impact on SaaS businesses.

However, many experts think the sell-off has been overdone, and perhaps many Stake investors agree.

This might be why Xero was the 10th-most-traded ASX 200 share on the platform between 2 and 18 March.

Xero shares have fallen 9.9% since 28 February.

Foolish takeaway

Here are some words of wisdom from Kylie Purcell, Senior Markets Analyst at Stake, regarding the ASX 200’s volatility this month:

For equity investors, this is another reminder of how unpredictable the markets can be during a geopolitical crisis.

Prices can swing sharply in both directions as more information emerges and these moments can become incredibly difficult to trade.

The key for investors is not to react to every headline or price swing and to remain diversified.

The post The war in Iran has inspired an unexpected ASX 200 market trend appeared first on The Motley Fool Australia.

More reading

• Region Group extends $100m securities buy-back – earnings update
• 5 things to watch on the ASX 200 on Wednesday
• Which ASX battered tech stock has the most upside according to brokers?
• ASX gold shares down 31% since war began: What should you do?
• ASX mining shares have slumped but long-term outlook is positive

Motley Fool contributor Bronwyn Allen has positions in Zip Co. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, WiseTech Global, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Lynas Rare Earths Ltd. The Motley Fool Australia has positions in and has recommended WiseTech Global and Xero. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.