Key Momentum Shifts

  • Materials (XMJ) and Real Estate (XJR) Remain in the Leading Quadrant: Both sectors continue to display strong relative strength and positive momentum, maintaining their positions at the forefront of the current ASX sector rotation.
  • Information Technology (XIJ) Shows Strong Improvement: Technology has moved strongly within the Improving quadrant, indicating accelerating relative momentum and increasing potential to challenge the Leading group.
  • Health Care (XHJ) Strengthens: Health Care is positioned in Improving, supported by its 1.45% daily gain and a clear improvement in relative momentum.
  • Consumer Discretionary and Communication Services Remain Improving: Consumer Discretionary (XPJ) and Communication Services (XSJ) continue to occupy the Improving quadrant, although their momentum remains less pronounced than Materials and Technology.
  • Financials (XFJ) and Energy (XEJ) Remain in Weakening: Both sectors continue to lose relative momentum, with Financials particularly weak following a 2.27% decline in the latest session.
  • Telecommunications, Consumer Staples and Utilities Remain Lagging: Telecommunications (XTJ), Consumer Staples (XDJ) and Utilities (XUJ) remain below the centre of the RRG, indicating weaker relative momentum despite Telecommunications recording the strongest daily gain.
  • Sector Rotation Remains Selective: Two sectors occupy Leading, while five are in Improving, three are Lagging and two remain in Weakening, suggesting that momentum is broadening but Leadership is still concentrated.

The latest Relative Rotation Graph (RRG) for 10 August 2026 indicates that the Australian Equity market is experiencing a continued rotation toward stronger-performing sectors. Materials (XMJ) and Real Estate (XJR) remain in the Leading quadrant, while Information Technology (XIJ), Health Care (XHJ), Consumer Discretionary (XPJ), Communication Services (XSJ) and Industrials (XNJ) are positioned in Improving.

Meanwhile, Financials (XFJ) and Energy (XEJ) remain in Weakening, while Telecommunications (XTJ), Consumer Staples (XDJ) and Utilities (XUJ) remain in Lagging. The daily performance data adds an important distinction: Telecommunications gained 1.70% and Health Care rose 1.45%, demonstrating that short-term price performance and relative momentum positioning can differ.

Momentum Breakdown by Quadrant

ASX Sector Relative Momentum Chart (at the closing price of 10/08/2026). Powered by: amibroker.com.

Leading Quadrant

  • Materials (XMJ) remains in the Leading quadrant, confirming sustained relative strength and positive momentum. The sector gained 1.22% in the latest session, reinforcing its position as one of the strongest areas of the Australian market.
  • Real Estate (XJR) also remains in Leading, indicating continued relative strength and positive momentum. The sector advanced 1.12%, suggesting that property-related stocks continue to attract investor interest.

The presence of both Materials and Real Estate in Leading indicates that resource and property-related sectors remain important sources of market leadership.

Improving Quadrant

  • Information Technology (XIJ) is positioned prominently in Improving, with its trajectory indicating a strong acceleration in relative momentum. The sector gained 0.57% and appears to be moving toward the Leading quadrant.
  • Health Care (XHJ) has strengthened within Improving. Its 1.45% gain in the latest session provides additional evidence of renewed buying interest and improving market participation.
  • Consumer Discretionary (XPJ) remains in Improving, suggesting that consumer-related shares continue to recover relative momentum despite a 0.28% decline in the latest session.
  • Communication Services (XSJ) remains in Improving, with its position indicating continued but more moderate improvement in relative momentum. The sector gained 0.36%.
  • Industrials (XNJ) is also positioned in Improving, although it remains close to the centre of the RRG. Its daily performance was broadly flat at 0.05%.

The Improving quadrant is therefore becoming an important area to monitor, particularly Information Technology and Health Care, which appear to have stronger upward momentum than some of the other sectors in the group.

Weakening Quadrant

  • Financials (XFJ) remains in the Weakening quadrant, indicating continued deterioration in relative momentum. The sector declined a significant 2.27% in the latest session, making it the weakest-performing ASX sector.
  • Energy (XEJ) also remains in Weakening, suggesting that its previous relative strength continues to fade. The sector was broadly unchanged, gaining just 0.05%.

The positioning of Financials and Energy indicates that both sectors currently face deteriorating relative momentum, although their trajectories should be monitored for signs of stabilisation or rotation back toward Improving.

Lagging Quadrant

  • Telecommunications (XTJ) remains in Lagging despite recording a strong 1.70% gain in the latest session. This highlights that the sector's broader relative momentum remains weak even though short-term price performance has improved.
  • Consumer Staples (XDJ) remains in Lagging, with relative momentum continuing to appear subdued. The sector declined 0.45%.
  • Utilities (XUJ) also remains in Lagging, indicating continued relative weakness. The sector eased 0.23%.

The Lagging classification suggests that sustained improvement would be required before these sectors can rotate into Improving and establish stronger relative momentum.

Strategic Summary

The latest Relative Rotation Graph highlights a gradually broadening but still selective rotation across the Australian equity market. Materials (XMJ) and Real Estate (XJR) remain in Leading, confirming their status as the primary sources of relative strength.

At the same time, Information Technology (XIJ) and Health Care (XHJ) are among the most notable sectors to watch within Improving, supported by strengthening relative momentum and positive recent price performance. Consumer Discretionary, Communication Services and Industrials also remain in Improving, suggesting that participation is becoming broader.

However, Financials (XFJ) and Energy (XEJ) remain in Weakening, while Telecommunications, Consumer Staples and Utilities remain in Lagging. The sharp divergence between Telecommunications' strong 1.70% daily gain and its Lagging RRG position also demonstrates why relative momentum analysis can provide a different perspective from a single-session performance ranking.

Overall, the RRG suggests that Materials and Real Estate continue to provide leadership, while Technology and Health Care are emerging as the key improving sectors. A continued rotation of these Improving sectors toward Leading would provide stronger confirmation of a broadening bullish market structure.