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Which ASX 200 sectors performed the best in November? 

row of white eggs with cartoon sad faces with one gold egg with happy face and crown representing high performing asx share
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While the S&P/ASX 200 Index (ASX: XJO) lifted more than 9.5% in November, some sectors performed significantly better than others. Here’s the rundown of which sectors did the heavy lifting last month. 

S&P/ASX 200 Energy Index (ASX: XEJ) 

The ASX 200 Energy Index rallied 29.4% in November but was still down 29.6% year to date. The rise followed a 23% improvement in crude oil prices to US$44 a barrel.

Energy giants, Woodside Petroleum Limited (ASX: WPL), Santos Ltd (ASX: STO), Oil Search Ltd (ASX: OSH) and Origin Energy Ltd (ASX: ORG) all finished November in a similar fashion, with their share prices increasing between 27% and 45%. 

S&P/ASX 200 Financials Index (ASX: XFJ) 

The ASX 200 Financials Index increased 15% in November, driven by the significant share price improvements across the big four banks.

The Reserve Bank of Australia (RBA) committed to supporting the economy through a number of channels including lowering the cash rate to a record low of 0.1% in November. The RBA provided the following commentary with its recent monetary policy measures:

Lower borrowing costs free up cash flow for both households and businesses, some of which will be spent. Lower interest rates also support asset prices, which boost balance sheets and consumption and investment. And a lower structure of interest rates leads to a lower value of the Australian dollar than would otherwise be the case. The end result is a stronger economy and more jobs. 

While banks have experienced a significant reduction in earnings and dividends, things have taken a turn for better. The Commonwealth Bank of Australia (ASX: CBA) updated the market on 11 November with its COVID-19 temporary loan repayment deferral data for the month of October. This update saw a net reduction in total loan deferred facilities of 59% during October. Approximately 52,000 loans remained in deferral as at 31 October, down 75% from 30 June. 

S&P/ASX 200 Communication Services Index (ASX: XTJ) 

The ASX 200 Communication Services Index is heavily weighted towards Telstra Corporation Ltd (ASX: TLS). Both the index and the Telstra share price increased 12.5% in November. This followed the announcement of a potential restructuring of the company to create three separate legal entities. Telstra CEO, Andrew Penn, believes the restructure will allow the company to take advantage of potential monetisation opportunities for its infrastructure assets. The company also reaffirmed its FY21 guidance that was provided to the market with its full year results in August. 

S&P/ASX Real Estate Index (ASX: XRE) 

The ASX 200 Real Estate Index improved 11.5% in November. The easing of restrictions in Victoria saw a significant improvement in retail conditions and rental billings for shopping centre real estate investment trusts (REITs) including GPT Group (ASX: GPT), Vicinity Centres (ASX: VCX), Stockland Corporation Ltd (ASX: SGP) and Scentre Group (ASX: SCG)

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Returns as of 6th October 2020

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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