Key Momentum Shifts

  • Three Sectors Remain in Leading: Health Care (XHJ), Energy (XEJ) and Utilities (XUJ) continue to occupy the Leading quadrant.
  • Health Care Maintains Strongest Position: XHJ remains the furthest into Leading, retaining the strongest relative strength and momentum profile.
  • Energy and Utilities Remain Strong: XEJ and XUJ continue to hold positions above the RRG midlines, although their Leadership is less pronounced than Health Care.
  • Financials Shows Improving Momentum: XFJ has entered the Improving quadrant, signalling a positive shift in relative momentum.
  • Consumer Staples Remains Improving: XSJ continues to occupy Improving, although its position remains closer to the centre.
  • Industrials Enters Improving: XNJ has moved from the Lagging/Improving boundary into the Improving quadrant, indicating strengthening relative momentum.
  • Technology and Materials Are Weakening: XIJ and XMJ remain in Weakening, suggesting deterioration in their previous relative strength.
  • Four Sectors Remain Lagging: Consumer Discretionary (XDJ), Resources (XJR), Real Estate (XPJ) and Communication Services (XTJ) remain in the Lagging quadrant.
  • Daily Performance Remains Mixed: Financials recorded the strongest gain at 0.50%, while Energy recorded the largest decline at 1.70%.

The latest Relative Rotation Graph for 3 September 2026 shows a selective momentum structure across ASX sectors. Health Care, Energy and Utilities remain in Leading, while Financials, Consumer Staples and Industrials are positioned in Improving. Information Technology and Materials remain in Weakening, while Consumer Discretionary, Resources, Real Estate and Communication Services continue to occupy Lagging. The daily performance data also shows a significant divergence between relative momentum and short-term returns.

Momentum Breakdown by Quadrant

ASX Sector Relative Momentum Chart (at the closing price of 03/09/2026). Powered by: amibroker.com.

Leading Quadrant

Health Care (XHJ), Energy (XEJ) and Utilities (XUJ) remain in the Leading quadrant.

Health Care continues to occupy the strongest position within the Leading group. Its location deep in the upper-right portion of the RRG indicates strong relative strength and momentum. However, its trajectory has been moving lower, suggesting that momentum is moderating from elevated levels. Continued downward movement could eventually signal a transition toward Weakening.

Energy (XEJ) remains in Leading, although its position is considerably closer to the RRG centre than Health Care. This indicates that its leadership is less established from a relative-momentum perspective. Despite falling 1.70% on the day, XEJ remains above the key RRG midlines.

Utilities (XUJ) also remains in Leading and continues to demonstrate positive relative momentum. Its position above the horizontal midline confirms that the sector remains relatively strong, although its trajectory should be monitored for signs of further movement toward the centre.

Improving Quadrant

Financials (XFJ), Consumer Staples (XSJ) and Industrials (XNJ) are positioned in the Improving quadrant.

Financials (XFJ) has now entered Improving, representing an important change from the previous session when it remained in Lagging. Its current position and trajectory indicate that relative momentum is strengthening. The sector also recorded the strongest daily performance, gaining 0.50%, providing additional confirmation of its improving short-term momentum.

Consumer Staples (XSJ) remains in Improving. Its current position indicates that relative momentum continues to strengthen, although the sector has not yet moved into Leading. A continued movement toward the upper-right portion of the RRG would strengthen the signal that XSJ is transitioning toward established leadership.

Industrials (XNJ) has also entered Improving after previously sitting close to the boundary between Lagging and Improving. This represents an early but notable improvement in its relative momentum profile. Its current position suggests that the sector is beginning to recover relative strength, although further movement into the upper-right quadrant would be required to confirm a more established improvement.

Weakening Quadrant

Information Technology (XIJ) and Materials (XMJ) remain in the Weakening quadrant.

Information Technology continues to show deteriorating relative momentum. Its position below the horizontal midline indicates that its previous relative strength is losing momentum. A continued movement downward and toward the left would increase the likelihood of a rotation into Lagging.

Materials (XMJ) is also positioned in Weakening. Although its short-term performance was broadly unchanged, its RRG position indicates that relative momentum has deteriorated. A recovery toward the upper-right would be required to signal stabilisation and a potential return toward Leading.

The presence of both Technology and Materials in Weakening suggests that some previously stronger areas of the market are losing momentum, even though they have not yet entered the Lagging quadrant.

Lagging Quadrant

Consumer Discretionary (XDJ), Resources (XJR), Real Estate (XPJ) and Communication Services (XTJ) remain in the Lagging quadrant.

These sectors continue to sit below the key RRG midlines, indicating weaker relative momentum compared with the broader market. Real Estate (XPJ) is clearly positioned in Lagging, while Consumer Discretionary and Resources remain among the weaker areas of the RRG.

Resources (XJR) has moved closer to the centre of the chart, suggesting some potential stabilisation in relative momentum. However, it remains in Lagging and needs further upward movement to establish a sustained recovery.

Real Estate (XPJ) remains in Lagging, indicating that its relative performance has yet to show a convincing improvement. Communication Services (XTJ) also remains below the horizontal midline, while Consumer Discretionary (XDJ) continues to occupy a relatively weak position.

Among these sectors, the direction of the RRG trajectories remains important. Sustained movement toward the centre would indicate recovering relative momentum, while continued movement away from the centre would reinforce their Lagging status.

Bottom Line

The latest RRG indicates selective improvement in ASX sector momentum, with Health Care remaining the strongest established leader alongside Energy and Utilities. Financials, Consumer Staples and Industrials are now in Improving, with Financials and Industrials showing particularly notable momentum shifts.

The move of Industrials into Improving is an important development, as it confirms the early recovery signalled in the previous session. Financials has also strengthened materially, supported by its 0.50% daily gain.

In contrast, Information Technology and Materials remain in Weakening, while Consumer Discretionary, Resources, Real Estate and Communication Services continue to lag. Overall, the RRG structure remains mixed, but the improving positions of Financials, Industrials and Consumer Staples provide early signs of broader sector rotation. Continued movement of these sectors toward Leading would strengthen the outlook for a more broadly supported ASX market.