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A 2020 Winner in Asia’s Stock Market Is Now the Biggest Loser


Photographer: Wang Zhao/AFP/Getty Images

While technology stocks continue to front Asia’s equity rally, one hot sector from 2020 has fallen to the bottom of the leaderboard: health care.

Essentially flat year-to-date, a gauge of the sector is the worst-performing in Asia, lagging the region’s benchmark by eight percentage points. It is on track to underperform the MSCI Asia Pacific Index for a third straight month, the longest losing streak in three years.

Health care stocks have underperformed Asia peers for third straight month

A growing expectation of a return to normal for the global economy has caused investors to abandon defensive bets made during the pandemic, such as health care — the second-best performer last year. Energy shares have staged a comeback on the rebound in crude prices, while financials have strengthened thanks to the rise in bond yields.

“The market is reflecting re-opening and recovery expectations, which is supportive of cyclical sectors rather than health care,” said Kieran Calder, head of Asia equity research at Union Bancaire Privee Ubp SA.

Hefty valuations are also a concern, according to Calder. The industry gauge is trading just below 30 times forward earnings, the highest among all sectors, according to data compiled by Bloomberg. The benchmark is on just 18 times.

Fading Retail Frenzy

Read More: A 2020 Winner in Asia’s Stock Market Is Now the Biggest Loser

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