Insights

Which sectors are driving the ASX 200 to record highs?

The ASX 200 has ripped to record highs. Here are the sectors backing the index.
The post Which sectors are driving the ASX 200 to record highs? appeared first on The Motley Fool Australia. –

The S&P/ASX 200 Index (ASX: XJO) has made new record all-time highs on Thursday with an intraday high of 7,281. Here’s the breakdown of which ASX 200 sectors are driving the market higher.

Financial Services

According to Market Index, the Financial Services sector weighs in at 28.2% of the ASX 200. The S&P/ASX Financials Index (ASX: XFJ) is up 3.5% in the past month, with the big four banks all clearing February 2020 pre-COVID levels.

A special mention goes to the Commonwealth Bank of Australia (ASX: CBA) share price for closing above $100 in May. CBA is the only big four bank to make a new record all-time high in the past few years. The remaining three banks still trade at a significant discount to 2015 highs. Its outperformance and position as the ASX’s largest stock has likely given the market an extra ‘kick’.

Energy

Oil prices have recently hit a two and half year high of US$69 per barrel. This has seen a surge in the S&P/ASX Energy Index (ASX: XEJ), which has risen ~9% in the last three trading sessions and 8% in the past month. While the energy index might have jumped the most out of all ASX 200 sectors, it only constitutes 3.6% of the overall index.

Materials

Despite the recent volatility in the iron ore price, the S&P/ASX Materials Index (ASX: XMJ) is up ~5% in the past month with a 21% weighting.

This is supported by the BHP Group Ltd (ASX: BHP), Fortescue Metals Group Limited (ASX: FMG) and Rio Tinto Limited (ASX: RIO) recovering after China’s plans to keep hot commodity prices at bay.

Foolish takeaway

Materials and financial services account for almost half the weighting of the ASX 200. With financial services, particularly the big four banks, making a strong statement in May, and materials keeping it together despite spot price volatility, these two sectors have arguably carried the market to new all-time record highs.

The post Which sectors are driving the ASX 200 to record highs? appeared first on The Motley Fool Australia.

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