Key Momentum Shifts

  • Five Sectors Remain in Leading: Health Care (XHJ), Utilities (XUJ), Energy (XEJ), Resources (XJR) and Materials (XMJ) continue to occupy the Leading quadrant.
  • Health Care Maintains Strongest Position: XHJ remains the furthest into Leading, although its trajectory continues to move lower, signalling some moderation in relative momentum.
  • Utilities Remains Strong: XUJ continues to hold a firm Leading position, supported by strong relative strength.
  • Energy Leads Daily Performance: XEJ gained 1.18% on 1 September, the strongest daily performance among all sectors, although its RRG position remains closer to the centre.
  • Resources and Materials Stay in Leading: XJR and XMJ remain above the RRG midlines and also recorded strong daily gains of 0.90% and 0.85%, respectively.
  • Consumer Staples Remains Improving: XSJ is the only sector in Improving, indicating that its relative momentum continues to strengthen.
  • Information Technology Remains Weakening: XIJ continues to occupy Weakening despite its position on the positive side of the relative-strength axis.
  • Five Sectors Remain Lagging: Consumer Discretionary (XDJ), Communication Services (XTJ), Industrials (XNJ), Financials (XFJ) and Real Estate (XPJ) remain in the Lagging quadrant.
  • Daily Performance Is Mixed: Five sectors gained on 1 September, while seven declined, highlighting a narrower market advance despite the established Leading group.

The latest Relative Rotation Graph for 1 September 2026 continues to show a selective momentum structure across ASX sectors. Five sectors remain in Leading, while Consumer Staples is the only sector in Improving. Information Technology remains in Weakening, and five sectors continue to occupy Lagging. The daily performance data also shows a clear divergence, with Energy, Resources and Materials among the strongest performers while several sectors recorded notable declines.

Momentum Breakdown by Quadrant

ASX Sector Relative Momentum Chart (at the closing price of 02/09/2026). Powered by: amibroker.com.

Leading Quadrant

Health Care (XHJ), Utilities (XUJ), Energy (XEJ), Resources (XJR) and Materials (XMJ) 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 is moving lower, suggesting that momentum is beginning to moderate. Continued downward movement could eventually signal a transition toward Weakening.

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

Energy (XEJ) remains in Leading and recorded the strongest daily gain of 1.18% on 1 September. However, its RRG position is closer to the centre than Health Care and Utilities, indicating that its Leadership is less established from a relative-momentum perspective.

Resources (XJR) and Materials (XMJ) also remain in Leading. Their positions above the RRG midlines indicate positive relative momentum, while their daily gains of 0.90% and 0.85% reinforce their current strength. Nevertheless, their proximity to the centre makes their future trajectories important to monitor.

Improving Quadrant

Consumer Staples (XSJ) remains the only sector in the Improving quadrant.

Its current position indicates that relative momentum is strengthening, although the sector has not yet moved into Leading. The trajectory makes Consumer Staples an important sector to watch for further improvement.

A continued movement toward the upper-right portion of the RRG would strengthen the signal that Consumer Staples is transitioning toward established leadership. Conversely, a Reversal toward the centre would weaken the current improvement signal.

Weakening Quadrant

Information Technology (XIJ) remains in the Weakening quadrant.

The sector's current position indicates that its previous relative strength is losing momentum. XIJ remains on the positive side of the relative-strength axis, but its position below the horizontal midline indicates deterioration in its momentum profile.

The sector also declined 0.75% on 1 September, reinforcing the recent loss of momentum. Continued movement downward and toward the left would increase the likelihood of a rotation into Lagging, while a reversal toward the upper-right would suggest that relative momentum is stabilising.

Lagging Quadrant

Consumer Discretionary (XDJ), Communication Services (XTJ), Industrials (XNJ), Financials (XFJ) and Real Estate (XPJ) remain in the Lagging quadrant.

These sectors continue to sit below the key RRG midlines, indicating weaker relative momentum compared with the broader market. Their current positions suggest that there has not yet been sufficient improvement to trigger a rotation into Improving.

Daily performance was also generally weak across this group. Consumer Discretionary recorded the largest decline at 1.81%, followed by Communication Services at 1.66% and Real Estate at 0.13%. Financials declined 0.37%, while Industrials fell 0.85%.

Among these sectors, the direction of the RRG trajectories remains more important than their current positions alone. 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 continues to indicate selective rather than broad-based sector momentum. Health Care and Utilities remain the strongest established leaders, while Energy, Resources and Materials continue to occupy Leading and were also among the strongest daily performers on 1 September.

Consumer Staples remains the key emerging momentum sector, with its position in Improving indicating strengthening relative performance. In contrast, Information Technology remains the key weakening sector, with its RRG position and 0.75% daily decline pointing to fading momentum.

The five sectors in Lagging, Consumer Discretionary, Communication Services, Industrials, Financials and Real Estate, continue to show weaker relative momentum, with several also recording significant daily declines. Overall, the RRG structure remains constructive but highly selective, making the direction of sector rotation an important consideration for the broader ASX market.