Why healthcare, tech and consumer staples shares underperformed the ASX 200 in November

ASX healthcare, tech and consumer staples shares were market leading sectors at the height of COVID-19 and lockdown measures. Fast forward to reopening borders and vaccine hopes and these sectors underperformed the S&P/ASX 200 Index (ASX: XJO) in November. With the ASX 200 gaining nearly 10% in November, let’s take a closer look at those shares lagging behind.

ASX consumer staples shares losing steam 

The S&P/ASX Consumer Staples Index was up 0.03% in November. Pantry stocking and higher in-home consumption pushed consumer staple heavyweights Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL) share prices higher throughout the year. But the supermarket giants remained largely flat in November with the Woolworths share price falling 4% and Coles share price down 1%.

Despite the weak performance, many brokers remain positive on the Woolworths share price, anticipating a strong Christmas trading period. Big brokers including Credit Suisse Group, Morgan Stanley and UBS Group (USA) retain price targets between $40.80 and $44.00 for Woolworths shares. 

Mid-cap consumer staple shares also faced significant challenges in relation to rising tensions with China. These include recent tariffs on wine and the blocking of China’s Mengnui Dairy’s acquisition of Lion Dairy. This has seen the A2 Milk Company Ltd (ASX: A2M) share price unable to pick up steam and remain flat for the month. Meanwhile, the Treasury Wine Estates Ltd (ASX:TWE) share price was down 7% for November. 

Healthcare and technology shares taking a breather 

The S&P/ASX 200 Info Tech Index (ASX: XIJ) was up 4.70% in November which, whilst decent enough, underperformed the wider ASX 200 by nearly 5%. Many tech shares are taking a breather after spectacular runs to new highs throughout the year. These include the likes of Afterpay Ltd (ASX: APT) plateauing after hitting $100 in October and NextDC Ltd (ASX: NXT) falling 10% after more than doubling this year. Xero Limited (ASX: XRO), on the other hand, managed to hit an all-time record high of $135 in late November. 

Similarly, the S&P/ASX 200 Health Care Index (ASX: XHJ) was up 2.72% in November. Healthcare heavyweight CSL Limited (ASX: CSL) closed 4% higher, but its shares are largely flat year to date.

Elsewhere, the Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price was down 1.25% after its 60% share price run this year. 

Sonic Healthcare Limited (ASX: SHL) was the worst performing large cap healthcare stock, down almost 6%. Its shares are relatively flat year to date following the adverse impacts of lockdown, coronavirus infection fears and cancellations of elective surgeries. The company’s core base laboratory business revenues are improving with most regions up on prior year levels. This includes negative but improving growth in the United States and United Kingdom. Sonic transitioned its business into providing significant support for COVID testing, especially in the US, Europe and Australia. 

Foolish takeaway

ASX tech and healthcare sectors still delivered positive returns in November. One could argue that their underperformance against the boarder ASX 200 in November was largely attributable to the surge in the share prices of the big four banks.