Sector sensitivity: who reacts how to macro conditions

The market rarely moves as a whole. Far more often a single event spreads across sectors with different signs — and understanding those signs is more useful than forecasting the event.

A rate rise

Companies with heavy debt lose: servicing it gets dearer. Housebuilders lose — mortgages get more expensive and demand falls.

Banks gain, but not always: their interest margin depends on which rises faster, the yield on loans or the cost of funding.

Growth companies lose, since their valuation rests on distant future profits: with a high rate the distant future is worth less.

A weakening rouble

Exporters gain, importers lose — Exporters and the exchange rate: who gains from a weak rouble.

Accelerating inflation

Companies able to pass costs into prices gain: a strong brand, weak competition, an essential product. Those whose prices are regulated or capped by competition lose.

A slowing economy

Defensive sectors hold up better: food retail, utilities, telecoms. Cyclicals fall harder — see Economic cycles: why downturns repeat.

How to use it

Not to reshuffle a portfolio for every forecast — costs would eat the gain. But as a check: was the portfolio assembled by accident from securities that react to the same factor the same way. That is exactly what hidden concentration is — Diversification: what it gives and what it does not.