ASX Sector Momentum Update: Six Sectors Remain in Leading

Robert Luong

26 August 2026 09:48 AM AEST

ASX Sector Momentum Update: Six Sectors Remain in Leading

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Key Momentum Shifts

Six Sectors Remain in Leading: Health Care (XHJ), Information Technology (XIJ), Consumer Discretionary (XDJ), Resources (XJR), Utilities (XUJ) and Energy (XEJ) remain in the Leading quadrant.
Health Care Maintains Leadership: XHJ remains the strongest-positioned sector, located furthest into the upper-right area of the RRG.
Technology Remains a Leader: XIJ continues to hold a strong Leading position, although its downward trajectory suggests moderating relative momentum.
Communication Services Improves: XTJ has moved into the Improving quadrant, signalling an early recovery in relative momentum.
Five Sectors Remain in Lagging: Financials (XFJ), Consumer Staples (XSJ), Industrials (XNJ), Materials (XMJ) and Real Estate (XPJ) remain in Lagging.

The latest Relative Rotation Graph for 25 August 2026 shows a relatively constructive but selective momentum structure across the Australian Equity market. Six sectors remain in Leading, one sector has moved into Improving and five remain in Lagging, while no sectors currently occupy the Weakening quadrant.

Momentum Breakdown by Quadrant

ASX Sector Relative Momentum Chart (at the closing price of 25/08/2026). Powered by: amibroker.com.

Leading Quadrant

Health Care (XHJ), Information Technology (XIJ), Consumer Discretionary (XDJ), Resources (XJR), Utilities (XUJ) and Energy (XEJ) remain positioned in the Leading quadrant.

Health Care (XHJ) maintains the strongest relative momentum within the group. Its position deep in the upper-right area of the RRG indicates strong relative strength and momentum, keeping it as the most established sector leader.

Information Technology (XIJ) also remains firmly in Leading. However, its downward trajectory indicates that relative momentum is moderating. While the sector remains a clear leader, continued movement toward the centre would increase the risk of a future rotation into Weakening.

Consumer Discretionary (XDJ) remains in a constructive position within Leading, while Resources (XJR) continues to hold strong relative momentum. Utilities (XUJ) also remains in Leading, although its position closer to the centre means its trajectory warrants closer monitoring.

Energy (XEJ) remains in Leading but is positioned relatively close to the centre of the RRG. This suggests that its Leadership is less established than that of the strongest sectors. Further movement toward the upper-right would strengthen its momentum profile, while movement toward the centre could signal fading relative strength.

Improving Quadrant

Communication Services (XTJ) has moved into the Improving quadrant, representing the most notable change in the latest momentum structure.

Its new position indicates that relative momentum is beginning to recover after previously remaining in Lagging. The sector is now moving closer to the centre and upper-right area of the RRG, suggesting improving relative strength.

A continued movement further into Improving would provide stronger confirmation that momentum is recovering. If this trajectory persists, Communication Services could eventually rotate into Leading, providing a broader source of positive sector momentum.

Lagging Quadrant

Financials (XFJ), Consumer Staples (XSJ), Industrials (XNJ), Materials (XMJ) and Real Estate (XPJ) remain in the Lagging quadrant.

Financials (XFJ) continues to occupy one of the weakest positions within the group, indicating particularly weak relative momentum compared with the broader ASX sector universe.

Consumer Staples (XSJ), Industrials (XNJ), Materials (XMJ) and Real Estate (XPJ) also remain below the key RRG midlines. Their current positions indicate that relative momentum has not yet recovered sufficiently to move into Improving.

The reduction from six to five sectors in Lagging is a constructive development, but the remaining concentration in this quadrant shows that the improvement in sector momentum is still selective rather than broad-based.

Strategic Summary

The latest RRG shows six sectors in Leading, one in Improving and five in Lagging, with no sectors currently positioned in Weakening. Health Care remains the strongest relative momentum sector, while Information Technology continues to provide strong leadership despite signs of moderation.

The move of Communication Services into Improving is the key positive development, suggesting that relative momentum may be beginning to broaden beyond the established leaders. At the same time, the positions of Utilities and Energy closer to the centre of the RRG Warrant monitoring for any changes in their leadership status.

Overall, the momentum structure remains constructive but concentrated. Health Care, Information Technology, Consumer Discretionary, Resources, Utilities and Energy continue to lead the ASX sector universe, while further improvement among the five Lagging sectors would be needed to confirm a broader and more sustainable strengthening of market momentum.

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