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 Remains in Leading: XEJ remains above the RRG midlines, although its position is closer to the centre than Health Care and Utilities.
  • Resources and Materials Stay in Leading: XJR and XMJ remain in Leading, despite recording sharp daily declines of 2.69% and 3.08%.
  • Consumer Staples Remains Improving: XSJ continues to occupy the Improving quadrant and recorded the strongest daily gain of 0.81%.
  • Industrials Nears Improving: XNJ is positioned at the boundary between Lagging and Improving, suggesting an early improvement in relative momentum.
  • Information Technology Remains Weakening: XIJ continues to occupy Weakening despite remaining on the positive side of the relative-strength axis.
  • Four Sectors Remain Lagging: Consumer Discretionary (XDJ), Communication Services (XTJ), Financials (XFJ) and Real Estate (XPJ) remain in the Lagging quadrant.
  • Daily Performance Is Predominantly Weak: Eight of the twelve sectors declined on 2 September, with Information Technology, Materials and Resources recording the largest losses.

The latest Relative Rotation Graph for 2 September 2026 continues to show a selective momentum structure across ASX sectors. Five sectors remain in Leading, while Consumer Staples is in Improving and Industrials is positioned close to the boundary between Lagging and Improving. Information Technology remains in Weakening, while four sectors continue to occupy Lagging. The daily performance data highlights a significant divergence between the RRG structure and short-term returns, particularly across Materials and Resources.

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, although its RRG position is closer to the centre than Health Care and Utilities. This indicates 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. However, their latest daily performances were notably weak, with Resources falling 2.69% and Materials declining 3.08%. This divergence suggests that their longer-term relative momentum remains positive, but short-term selling pressure has increased.

Improving Quadrant

Consumer Staples (XSJ) remains in the Improving quadrant.

Its current position indicates that relative momentum is strengthening, although the sector has not yet moved into Leading. XSJ also recorded the strongest daily performance on 2 September, gaining 0.81%, reinforcing its improving short-term momentum.

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.

Industrials (XNJ) is positioned very close to the boundary between the Lagging and Improving quadrants. Its location suggests that relative performance remains weak, but its trajectory is showing signs of improvement. This makes XNJ an important sector to monitor for a potential transition into Improving.

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 recorded the largest daily decline on 2 September, falling 3.35%. This sharp decline reinforces 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), 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 sustained rotation into Improving.

Daily performance was also generally weak across this group. Real Estate declined 1.22%, while Consumer Discretionary fell 0.43%. Communication Services declined 0.38% and Financials gained 0.25%, making Financials the strongest performer among the Lagging sectors on the day.

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 despite significant short-term declines in Resources and Materials.

Consumer Staples remains the key emerging momentum sector, supported by its Improving position and 0.81% daily gain. Industrials is also worth watching, as its RRG position sits close to the boundary between Lagging and Improving, suggesting a potential early-stage recovery in relative momentum.

In contrast, Information Technology remains the key Weakening sector, with its RRG position and 3.35% daily decline pointing to fading momentum. Overall, the RRG structure remains constructive but highly selective, with the direction of rotation in XNJ, XSJ and XIJ likely to be particularly important for the broader ASX sector outlook.