Berk is evaluating how the large firms listed on the Australian market performed for a quarter. He gathers two quarters (Q1 and Q2) of sector allocation for the benchmark (ASX 50) as presented below:

Industry Sector Weight (Q2) Weight (Q1) Financials 34.22 34.45 Materials 22.10 24.63 Health Care 12.27 11.12 Energy 5.15 3.20 Consumer Discretionary 5.40 5.31 Real Estate 5.93 6.20 Consumer Staples 5.57 5.25 Industrials 4.39 4.08 Communication Services 3.33 3.37 Information Technology 1.64 2.39 The ASX 50 covers the largest 50 firms listed on the Australian equity market.

a) Provide a short commentary on the 2 largest positive change and 2 largest negative change in the sector weights over the 2 quarters.

b) Explain the economic conditions that would have led to these changes in valuations.