ASX sector leaders and laggards in FY24

Among 11 market sectors, which include IT stocks and financial companies, the best performers S&P/ASX 200 Index (ASX:XJO) in FY24.

The S&P/ASX 200 Information Technology Index (ASX:XIJ) rose 27.99%, a S&P/ASX 200 Financial Index (ASX:XFJ) is up 23.11% in fiscal 2024.

Among the sectors lagging were consumer staples and materials stocks. This may be surprising, given that staples tend to be defensive during periods of high inflation.

Commodity stocks were impacted by mixed commodity prices, with silver, gold and copper rising strongly during the financial year, while iron ore was volatile and lithium was high.

This S&P/ASX200 Consumer staples index (ASX:XSJ) fell 6.89% and S&P/ASX 200 Materials Index (ASX:XMJ) fell 6.4% in fiscal 2024.

Let’s take a closer look at this.

Technology leading in market sectors in FY24

In general, S&P/ASX 200 Index (ASX:XJO) is up 7.83% in FY24.

The index rose from 7,203.3 points on June 30, 2023 to 7,767.5 points last Friday.

As the chart below shows, the ASX 200 index fell steadily over the first four months of FY24. Then, in early November, a Santa Claus rally began amid speculation that interest rates would be cut in 2024.

The ASX 200 was volatile after hitting a record high of 7910.5 points on April 2. Hopes for potential interest rate cuts have faded over the next three months as inflation has proven more rigid than expected.

Why has technology emerged as a leader in ASX market sectors?

The buzz surrounding artificial intelligence (AI) and its potential to significantly shift the dial on global productivity growth after many sluggish years is certainly a factor in the sector’s success.

American company producing semiconductors NVIDIA company was the flagship company among global AI companies in fiscal year 2024.

Nvidia shares are up nearly 200% in fiscal 2024 and up 2,900% in five years. Such is the excitement about AI and its potential to drive future enterprise innovation across multiple market sectors.

Dominated by technology NASDAQ Composite Indexwhere shares of Nvidia and its Magnificent Seven companies are located, achieved better results S&P 500 in fiscal 2024, with artificial intelligence driving approximately 30% growth.

This enthusiasm has rubbed off on ASX technology stocks in fiscal 2024, especially those most closely associated with the enabling development of artificial intelligence.

General director of a data center-as-a-service operator Nextdc Ltd (ASX:NXT) Craig Scroggie described AI as the “fourth industrial revolution” in a recent interview published on asx.com.au.

Scroggie said:

It is significantly shaping the data center industry, especially in environments where AI workloads are managed, whether for training or inference purposes.

While the full impact of AI in the Australian market is still emerging, trends seen around the world, particularly in the US, coupled with our active engagement with clients around the world, suggest a huge increase in demand for data center services powered by AI applications.

NextDC’s share price rose 41.72% in FY24, closing at $17.63 per share on Friday. It was the sixth-leading ASX 200 Technology share price gainer in FY2024.

Top 5 ASX 200 tech stocks for fiscal 2024

The top tech sector performer in FY24 was a social media app provider Życie360 Inc (ASX:360).

Life 360 ​​shares are up 122.72% in fiscal year 2024, closing at $16.37 on Friday.

Here are the rest of the top five ASX 200 technology stocks for share price growth in FY24.

Rank	ASX 200 Technology Shares	Share price on Friday	Growth in fiscal year 2024
1	Life360 Inc (ASX: 360)	16.37 PLN	122.72%
2	Altium limited liability company (ASX: ALU)	PLN 68.03	84.26%
3	Megaport limited liability company (ASX:MP1)	PLN 11.22	55.4%
4	Codan Sp. z o. o. (ASX: CDA)	$12.03	49.81%
5	Macquarie Technology Group Sp. z o. o (ASX:MAQ)	$94.57	38.42%