Sectors In Stock Market

11 Sectors In Stock Market

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Sectors In Stock Market –

Sectors in stock market are the most important topic that every investor or trader should know about. We always hear people in the stock market talk about the diversification of stock portfolios. Simply put, diversifying your portfolio means investing your money in different sector stocks.

Diversification can help to reduce a portfolio’s risk so that one asset or asset class’s performance doesn’t affect your entire portfolio. Some investment funds specifically target specific sectors according to their research. Every investor, fund manager, and the analyst should study the sector before investing in that sector’s stocks.

So, In this post, we will study the different sectors in stock market which will help us to understand what are the different sectors and how they are classified and which companies come under which sector.

Sectors In Stock Market

What are stock market sectors –

According to Global Industry Classification Standard (GICS) system, there are 11 different sectors in stock market. The Global Industry Classification Standard was developed by index providers MSCI and the S&P Dow Jones. GICS is the primary financial industry standard for defining sector classifications.

List of stock market sectors –

1. Financials Sector –

The financial sector includes companies that provide financial services which mean companies that handle money. The sector includes banks, insurance companies, brokerage houses, mortgage-related real estate investment trusts, investment companies, consumer finance, asset management, capital markets, and financial exchanges.

Examples – JP Morgan Chase, State Bank of India, HSBC

2. Healthcare Sector –

The healthcare sector includes companies that develop pharmaceuticals and treatments based on biotechnology, and services companies and healthcare equipment supplies that are needed for clinical trials. This sector includes all health-related companies.

Examples – Johnson & Johnson, Cipla, AstraZeneca

3. Real Estate Sector –

The real estate sector generally includes companies that develop or manage real estate properties. This also includes real estate investment trusts (REITs). REITs are companies that own, and operate, income-producing real estate.

Examples – American Tower Corp., DLF Ltd., Rightmove

4. Energy Sector –

The energy sector includes companies that are in the business of production, exploration, refining, and selling of energy resources such as natural gas, oil, coal, etc. This also includes companies that provide materials, and equipment to this energy sector industries.

Examples – Chevron, ONGC, Centrica

5. Consumer Staples Sector –

The consumer staples sector includes companies that are involved in food, beverage, and tobacco, also the companies which are involved in household goods and personal products. This sector companies produce products that are used on day to day basis. This sector is considered to be a defensive sector.

Examples – Procter & Gamble, ITC, Unilever

6. Consumer Discretionary Sector –

The consumer discretionary sector includes companies that are involved in goods and services which consumer wants but are not necessarily need. The demand for this sector varies because of consumer financial status. The consumer discretionary sector is also known as consumer cyclicals.

Examples – Nike, Asian Paints, Compass Group

7. Utilities Sector –

The utility sector includes companies that provide utility services such as gas, water, electric, and renewable energy. The utility sector is considered to be a defensive sector because consumers will always need the utilities.

Examples – American Electric Power, Tata Power, National Grid

8. Materials Sector –

The materials sector includes companies that provide various goods that are used in the manufacturing of construction materials, chemicals, glass, and paper. This sector also includes metals, mining, packaging, and forest product companies.

Examples – DuPont, Tata chemicals, Biome Technologies

9. Industrials Sector –

The industrial sector includes companies that are involved in the use of heavy equipment such as defense machinery, aerospace, airlines, manufacturing, construction, railroads, and logistics. This sector also includes electrical equipment, commercial supplies, transportation, and infrastructure companies.

Examples – Boeing, HAL, Melrose Industries

10. Information Technology Sector –

The information technology sector includes companies that manufacture semiconductors, software, and hardware as well as provide services of this. It also includes companies that provide technological solutions and companies that are involved in building semiconductor and hardware equipment and components.

Examples – IBM, TCS, AVEVA

11. Communication Services Sector –

The communication services sector includes companies of telecommunication services of wireless and old-style services. This sector also includes media, entertainment, and internet companies including television and radio companies.

Examples – Facebook, Bharti Airtel, Vodafone

Every person who wants to invest in stocks should know about these 11 sectors in stock market. As we have discussed it helps with diversification. The basic study of these sectors will help to find good investment stocks.

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