Source: David Gray/Reuters
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  • The ASX200 index soars 29.99 per cent and the All Ords swells 26.39 per cent in the 2021 fiscal year
  • The discretionary, financials and tech sectors lead the resurgence, following the pandemic-induced market nosedive and economic recession
  • The defensive utility sector lags behind as investors focus on higher-growth industries

The economic recovery, renewed optimism and a rebound in consumer spending over the 2021 financial year lifted the Australian market out of its pandemic-infused slump.

The All Ordinaries index — comprised of the 500 largest listed companies — grew a monster 26.39 per cent to 7585 points, nearing its new record high established earlier in June.

Likewise, the ASX200 climbed 29.99 per cent and reached 7,313 points, similarly near its new June high.

After a retreat to defensive stocks at the onset of the COVID-19 pandemic, improving economic conditions accompanied by mounting optimism saw investors return to higher-growth industries.

Breaking down the ASX200 Index into its sub-indices shows the discretionary, financials and tech sectors lead the resurgence. Although this is a small cross-section of the broader market, accounting for around 10 per cent of listed companies, it offers an important insight into trends.

Concerns of the banks capacity to support mortgages and businesses at the onset of the pandemic abated with the sector growing considerably, and heavy-weight Commonwealth Bank (CBA) hitting an all-time high of $105.91 on June 17, 2021.

The ascent of the IT sector can't be mentioned without the rise of Afterpay (APT) springing to mind; the company saw its share price effectively double to $116.13 at the close of trade on June 30, 2021. Shares in fellow buy now, pay later players Sizzle (SZL) and Zip Co (Z1P) have also soared.

Similarly, the uptake of consumer staple equities in FY20 tapered in favour of consumer discretionary stocks over the last fiscal year.

This was of course punctuated by WFH trading patterns that took hold whenever a new lockdown was announced: the grounding of travel and tourism stocks, the contraction of stay-at-home blues by shopping centre operators and the panic-buying-fuelled surge of supermarkets.

On the other hand, the only sector to retreat over the financial year was utilities. Sector heavy-weight APA Group (APA) lost one-fifth of its market capitalisation, Origin Energy (ORG) lost around a quarter of its value and lastly, AGL Energy (AGL) halved its share price.

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