ASX Sector Momentum Update: Financials Lead While Technology and Resources Lag

Robert Luong

22 September 2026 09:52 AM AEST

ASX Sector Momentum Update: Financials Lead While Technology and Resources Lag

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Key Momentum Shifts

Financials Remain Leading: Financials (XFJ) continue to occupy the Leading quadrant, gaining 0.63% during the session.
Communication Services and Industrials Remain Leading: Communication Services (XTJ) and Industrials (XNJ) remain positioned in Leading, despite daily performances of -0.43% and 0.05%, respectively.
Consumer Discretionary and Property Remain Improving: Consumer Discretionary (XDJ) and Property (XPJ) continue to occupy the Improving quadrant.
Energy at the Leading-Weakening Boundary: Energy (XEJ) is positioned almost directly on the horizontal axis, placing it at the boundary between Leading and Weakening after gaining 0.45%.
Three Sectors Remain Weakening: Consumer Staples (XSJ), Utilities (XUJ) and Health Care (XHJ) remain positioned in Weakening.
Resources, Materials and Technology Remain Lagging: Resources (XJR), Materials (XMJ) and Information Technology (XIJ) continue to occupy the Lagging quadrant.
Technology Remains Deeply Lagging: Information Technology declined 1.60% and remains substantially within the Lagging quadrant, indicating continued relative weakness.
Health Care Shows Daily Strength: Health Care gained 0.51% despite remaining in Weakening, highlighting the difference between daily performance and broader relative momentum.

The latest Relative Rotation Graph for 21 September 2026 shows continued divergence across ASX sector momentum. Financials, Communication Services and Industrials occupy the Leading quadrant, while Consumer Discretionary and Property remain in Improving. Consumer Staples, Utilities and Health Care are positioned in Weakening, while Resources, Materials and Information Technology remain in Lagging. Energy is positioned almost directly on the horizontal axis at the boundary between Leading and Weakening.

The chart also demonstrates that daily performance and broader relative momentum can diverge significantly. Financials and Health Care recorded positive daily performances while occupying different momentum quadrants, while Communication Services declined but remained in Leading.

Momentum Breakdown by Quadrant

ASX Sector Relative Momentum Chart (at the closing price of 21/09/2026). Powered by: amibroker.com.

Leading Quadrant

Financials (XFJ), Communication Services (XTJ) and Industrials (XNJ) are positioned in the Leading quadrant. The chart shows these sectors above the horizontal midpoint and to the right of the vertical axis, indicating relatively stronger momentum and relative strength.

Financials remains the most prominent sector within this group. XFJ gained 0.63% on 21 September, recording the strongest daily performance among the twelve sectors. Its position well inside the Leading quadrant indicates that its broader relative momentum remains stronger than most other sectors.

Communication Services also remains in Leading despite declining 0.43%. Its position demonstrates that the RRG reflects a broader momentum cycle rather than simply the latest daily return.

Industrials gained 0.05% and remains in Leading. Its position is relatively close to the central area of the chart, making its subsequent trajectory important. Continued movement toward the upper-right area would indicate further strengthening, while movement back toward the centre could signal a loss of relative momentum.

Improving Quadrant

Consumer Discretionary (XDJ) and Property (XPJ) remain in the Improving quadrant.

Consumer Discretionary declined 0.41% on 21 September but remains in Improving. Its position indicates that relative momentum continues to recover despite the negative daily performance.

Property gained 0.09% and also remains in Improving. Both sectors are positioned in the upper-left portion of the chart, indicating that their relative momentum is improving while relative strength remains below the Leading area.

Continued upward and rightward movement would provide stronger evidence of improving relative momentum and could eventually support a transition into Leading.

Weakening Quadrant

Consumer Staples (XSJ), Utilities (XUJ) and Health Care (XHJ) remain in the Weakening quadrant.

Consumer Staples declined 0.23%, while Utilities fell 0.11%. Health Care gained 0.51% on 21 September, yet remains in Weakening. This demonstrates that a positive daily performance does not necessarily result in an immediate improvement in broader relative momentum.

Health Care is positioned further into the lower-right portion of the chart, while Consumer Staples and Utilities are closer to the horizontal axis. A sustained upward movement toward the centre of the chart would provide the first indication that relative momentum is beginning to recover for these sectors.

Energy at the Leading-Weakening Boundary

Energy (XEJ) gained 0.45% on 21 September and is positioned almost directly on the horizontal axis. Its location places the sector at the boundary between the Leading and Weakening quadrants.

This makes Energy an important transition sector in the current RRG structure. A move above the horizontal axis would place XEJ in Leading, while a move below the axis would confirm a transition into Weakening.

The sector's positive daily performance adds further significance to its current position. Its subsequent trajectory will therefore be important in determining whether its broader relative momentum strengthens or deteriorates.

Lagging Quadrant

Resources (XJR), Materials (XMJ) and Information Technology (XIJ) remain in Lagging.

Information Technology declined 1.60% on 21 September and remains substantially within the Lagging quadrant. Its position indicates that a sustained improvement in relative momentum would be required before a transition out of Lagging could be confirmed.

Materials declined 0.66%, while Resources fell 0.49%. Both sectors remain in the lower-left area of the RRG, demonstrating weaker relative momentum compared with the Leading sectors.

The trajectories of Materials and Resources remain important because movement upward and toward the centre could provide an early indication of recovering relative momentum. However, both sectors remain firmly within Lagging at present.

Bottom Line

The 21 September 2026 ASX Relative Rotation Graph shows continued divergence across sector momentum. Financials, Communication Services and Industrials remain in Leading, while Consumer Discretionary and Property remain in Improving. Consumer Staples, Utilities and Health Care remain in Weakening, while Resources, Materials and Information Technology continue to occupy Lagging.

The most notable development is Energy's position at the boundary between Leading and Weakening. Its next movement will determine whether the sector retains Leading characteristics or moves formally into Weakening.

Financials remains the strongest daily-performing sector and is also positioned firmly in Leading, while Information Technology remains the deepest Lagging sector after recording the largest daily decline.

Overall, the latest RRG highlights continued sector rotation across the ASX. Financials, Communication Services and Industrials remain in Leading, Consumer Discretionary and Property are Improving, Consumer Staples, Utilities and Health Care are Weakening, Energy is at the Leading-Weakening boundary, while Materials, Resources and Information Technology remain Lagging.

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