April 13, 2021

Avoid Equity Investment in 7 Sectors


Supermarkets, personal products, etc., all are a part of the consumer staple sector. The stock market’s financial sector is a popular one and accommodates all the established and mature firms and companies. The broad categories help the portfolio managers to make their work easier.

Non-banking financial companies , asset management companies , rating and research institutions, insurance companies, and public and private banks are all part of this huge industry. In summary, sectors group several stocks based on similar business models, allowing investors to zoom in on a particular industry and identify a particular stock. The overload of information at the hands of investors eats up a lot of useful time. A sectoral approach to investing ensures investors spend valuable time on the right group before narrowing it down to the right stock. The wide range of sectors in stock market allows investors to pick and choose and then invest.

Consumer durables

The sector includes companies engaged in mining and metal refining, chemical products and forestry products. Infrastructure can be considered one of the primary drivers of India’s economy. The Indian government is focusing heavily on development in this sector and as a result, making considerable investments in highway/road maintenance, urban transport and renewable energy. The steel industry in particular has quickly become a solid option for investors seeking sector fund opportunities.

Besides brics 2019 summit declaration free trade agreement, you should also avoid Equity Investment in real estate ancillaries like companies in Ceramic, Sanitary, electrical etc. If ancillaries are dependent on residential demand then these companies will also not perform. Well, these are interesting times and what happens is that three or four industries are becoming more attractive. Simply because we had very good performances in the quarter ending December, the commentary has been very positive. This is a week when a number of conferences are taking place and banks are reiterating that the outlook for the coming year is very positive. So banking is one and Bank Nifty has corrected and is providing an opportunity for the medium and long term investors.

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  • The telecom sector consists of wireless providers, cable companies, internet service providers and satellite companies, among others.
  • In my posts, i keep highlighting that PSU stocks should be avoided.
  • With WealthDesk, constant monitoring and rebalancing the portfolio are undertaken to take care of the risk stemming from concentration.
  • We have listed some best Nse listed companies that you can invest now to earn a decent returns in coming months.

Equity Investment in Metals, Mining and Commodities is suicidal till the prices stabilize. Therefore, i am bearish on Equity Investment in metals, mining and commodities. It is difficult to call out the peak of something meaning that post that, they are going to decline. There are two factors here; One is on the net interest margin side. The second is on the growth of the loan book itself and of course the NPA cycle.

Let’s say that you read and understood the stock indicators from the previous chapter. Now you plan to invest in the stock market and call your friend you have been dealing with the stock market for a long time. You express your interest to him, and at the outset of the conversation, he asks you- in which sector do you want to invest? You want to invest in stocks; you know what market indicators are. The oil and gas sector of the stock market consists of companies involved in the exploration, extraction, refining, transporting and marketing of petroleum products like oil and natural gas. In this space, India has been holding one of the top positions for nearly a decade now.

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What drives consumer tables different from consumer discretionary is that the staples are the companies which produce products data consumed are used daily bias. You may not need to buy new car clothes order at a restaurant, but you need household goods from the supermarket to survive. You ask your friend, and he goes on by giving you an example of cuisine. He says “ assume that one fine day you order north Indian food from your favourite restaurant.

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There is an argument that the NPAs will not expand any further and they may correct a bit. But we do have a growth factor to rely on and the credit cost and the NPAs have been favourable. As well as banks have done in the last couple of years, especially in the last one year, there is still more momentum and I would focus on the banking industry. There is also a lot of dispersion for very different reasons.

Though we have filed complaint with police for the safety of your money we request you to not fall prey to such fraudsters. You can check about our products and services by visiting our website You can also write to us at , to know more about products and services. With the events of last year, healthcare and pharma have become a key area of focus all over the world. Additionally, with vaccination development and drives in full swing, this year will see suppliers becoming major contributors in this sector.

Factors To Consider Before Investing In A Market Sector

So, that gives you a clear picture of the many sectors in the Indian stock market. Now, did you know that there are indices built upon these sectors? Yes, there are, and that’s just what we’re going to be looking at in the upcoming chapter. In fact, household and personal care products account for around half the FMCG sales in India.

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It is one of the key strategies to be followed by any market participant to create wealth. Stocks reflect not just economic factors, but also government interventions and that may reflect into share prices of companies of that sector. Among the leading or lagging sectors, we often see the periodic rotation. This is like a relay race where the baton is passed from one sector to another among the overall leadership group as the market moves. Hence for a short-term trader too it is very important to keep track of how different sectors are behaving.

In FY2o, the revenue of the IT industry in India was estimated at US$ 44 billion. India’s IT sector’s core competencies have also attracted significant investment from abroad. India’s auto sector has been on a steady spree of development for decades now.

In terms of market capitalisation, Majesco , Happiest Minds Technologies , and Brightcom Group have outperformed by a wide margin among the index’s 51 participants. Wipro gained 54 per cent in value among the large IT stocks, while Mindtree gained 69 per cent. In the last year, the market value of TCS and Infosys climbed by 32 per cent and 13 per cent, respectively.

Information Technology Stock Sector

By the end of this article, you will understand the different sectors in stock market and the best ones to invest in. The growth is immense and has given rise to sectors ranging from healthcare, communication, technologies, and even real estate. The growing popularity of the stock market is out of no one’s notice. With immense popularity, various sectors have emerged in the arena of the stock market. If you are looking to gain an insight into the multiple sectors in stock market, you are at the right place.

market sectors

It is critical for an investor to recognise that even if an industry is in the spotlight, it is still necessary to analyse some of the crucial factors before making an investment choice. Therefore, your local food stores will be busy selling FMCG companies’ items even on terrible economic days. FMCG Sector company makes the goods that we frequently purchase and utilise. FMCG items ensure a consistent flow of revenue, which results in consistent earnings and a great return on investment.

Investors interested in gaining exposure to a specific area of the economy can invest in the stock of the specific company in that sector. For example a investor can invest in Maruti or Eicher Motors, who think that a Industrial – Auto sector can give higher returns in coming days. The Indian market has eleven sectors that accommodate in themselves all the industries and companies. The sectors include financials, healthcare, real estate, energy, consumer staples, communications, among many others.


You must determine if the firm can pay its bills and has future earning potential. Because communication is the foundation of all societies, the telecommunications industry keeps people linked. The initial phase involves wireless services, cables, and even traditional conventional telephone lines that assist individuals in connecting. This sector’s importance has grown in recent years since it now includes the media and entertainment industries. The Indian stock market is segmented into many sections that function as the wide classification for the many publicly traded companies.

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We have received your acceptance to do payin of on your behalf in case there is net sell obligation. The Client shall be wholly responsible for all his investment decisions and instruction. Your first installment will be deducted from ledger & subsequent from the bank. Hey, I have discovered this amazing financial learning platform called Smart Money and am reading this chapter on What are the Different Sectors in the Stock Market. If you’re like most people, perhaps you head out there every week, on average? Well, in that case, you’ll no doubt agree that any market is typically divided into multiple segments.

In general, these companies generate recurring revenue from consumers, but some subsets of the industry are facing rapid change. The industrial sector of the economy is one that make finished products which can then be utilized for construction and manufacturing industry. The other two are the primary sector and service sector (includes hospitality, consultancy and nursing. We have listed some very good companies that a investor should keep in his portfolio to get double to triple returns in next 3-5 years.

Read all the documents or product details carefully before investing. WealthDesk Platform facilitates offering of WealthBaskets by SEBI registered entities, termed as “WealthBasket Curators” on this platform. Investments in WealthBaskets are subject to the Terms of Service. The sectoral portfolios built by WealthDesk are based on a risk-weighted approach that ensures no company receives undue attention in allocating funds. The WealthBaskets are managed by SEBI registered professionals. As the growing trend can witness, healthcare, consumer staples, and information technology are the three top sectors for investors.

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The energy sector of the stock market covers such companies. Before discussing which sectors to invest in, it is essential to know about the types of sectors in stock market . The companies which operate malls, offices, and living communities come under this Real estate stock sector.

In 2019, the country became the fourth largest auto market in the world, getting ahead of Germany. The sector saw around 3.99 million units sold in the passenger and commercial vehicles categories. All of us are taking a while to get used to the new reality. The materials sector consists of mining, refining, chemical, forestry and related companies that are focused on discovering and developing raw materials. Since these companies are at the beginning of the supply chain, they are vulnerable to changes in the business cycle.

  • As a result, a sectoral approach to investing allows for this diversity to be accounted for.
  • These top 50 companies represent all the best stocks belong to best sectors in the economy.
  • They have been trending down and there is a stock correction to offer.

Additionally, it’s frequently suggested that investors diversify their portfolios to increase performance. Market segments, which include all businesses and industries, exist in India. Financial, healthcare, real estate, energy, consumer staples, and communications are just a few of the industries. Despite the nearly same growth rates across all industries, some have substantial returns.

The best stock screening, equity research and company analysis tool built by a passionate team of investors at Finology®. Much like this, the economy – and therefore, the stock market – also has different parts. Close behind is APL Apollo Tubes, which has seen a 104 per cent growth in revenue since January 2021. Vedanta, JSW Steel, Hindalco, and SAIL are among the other index constituents that have gained between 80 and 93 per cent. The rise of metal stocks has been even more impressive than the stock market recovery that has occurred since March 2020.

To make things easier for investors, the stock market is divided into many sectors that feature companies with comparable qualities. There is no definitive number, and this article’s stock market sector list is certainly not exhaustive. New companies evolve, and as a result, the count of sectors cannot afford to stay stagnant. Johnsons and Johnsons is one of the big companies that is part of the health care sector. Several implant manufacturing companies are also a part of the health care sector of the stock market.