Understanding the cyclicality of sectors is one of the most important parameters to look at before investing in a company.
In this article, we try to understand the key differences between a cyclical and
defensive sectors
Why is it important?
Well markets may have gone up but the leaders have periodically changed over the last 11 months.
When economic uncertainty was high Pharma, FMCG and IT led the charge for the markets, but as soon as economy started opening up, cyclicals soon joined the party. Meanwhile, the defensives took a back seat.