These were the best performing shares on the ASX 200 in May

best shares

Despite a disappointing end to the month, the S&P/ASX 200 index recorded a solid 1% gain in May thanks largely to the positive reaction to the shock election result.

Whilst a number of shares charged higher, there were a few standout performers that caught the eye.

The four shares listed below were the best performers on the index in May. Here’s why:

The Lynas Corporation Ltd (ASX: LYC) share price was the best performer on the ASX 200 in May with a gain of 54%. The rare earths producer’s shares raced higher during the month due to trade war concerns and a positive development in Malaysia. In respect to the trade war, there was speculation that China might block exports of rare earths to the United States in retaliation to recent actions. If this were to occur it could lead to a significant increase in demand for Lynas’ produce. Perhaps it is for this reason that the Malaysian government revealed that it would allow the company to continue operating its plant in the country.

The Evolution Mining Ltd (ASX: EVN) share price was some distance behind with a gain of 25.2% last month. A recovery in the gold price is largely behind Evolution’s strong form in May. Concerns over the trade war, fears of a U.S. recession, and speculation that the U.S. Federal Reserve may cut rates all strengthened the precious metal. Evolution wasn’t the only gold miner rising last month. A number recorded solid gains during the period, leading to the S&P/ASX All Ords Gold index pushing around 9.5% higher.

The Super Retail Group Ltd (ASX: SUL) share price was a strong performer in May, carving out a gain of 21.7%. Investors were fighting to get hold of the retailer’s shares following the surprise election result. This is because the promised tax cuts are expected to lead to a material improvement in both consumer sentiment and spending. Also boosting its share price was a positive broker note out of Morgan Stanley. According to the note, the broker upgraded the retailer’s shares to an overweight rating and lifted the price target on them to $10.00. Its analysts believe the market has undervalued its automotive business.

The Domain Holdings Australia Ltd (ASX: DHG) share price wasn’t far behind with a gain of almost 19%. A number of favourable developments helped lift the property listings company’s shares in May. These include the election result, potential rate cuts by the Reserve Bank, and APRA’s plan to reduce the mortgage serviceability threshold. Investors appear to believe these will lead to a recovery in the housing market and an increase in listings for Domain.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Super Retail Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.