The Market Sector is a part of the economy, usually broader than an industry. Two industries may form part of one market sector. For example, the pharmaceutical and medical devices industries are part of the health care sector.
The world’s major stock markets, and most of the smaller ones, are divided into market sectors so that company stocks that compete directly with one another are listed together.
Market sector in the bond markets refers to the type of issuer, i.e. corporate, utility, government or state.
In marketing, the term has the same meaning as market segments, i.e. parts of the mass market that can be specifically targeted in advertising campaigns.Global Industry Classification Standard
Market Sector by CIGS
MSCI and Standard & Poor’s developed an industry taxonomy in 1999, called GICS (Global Industry Classification Standard). GICS is widely used today by the global financial community.
It breaks down market sectors as follows: Energy, Materials, Industrials, Consumer Discretionary, Consumer Staples, Health Care, Financials, Information Technology, Telecommunication Services, and Utilities.
Analysts commonly specialize in certain market sectors. For example, an analyst at a large research firm may cover only medical device, pharmaceutical and biotech firms, i.e. the health care sector.
The four sectors of an economy
Economists say that a national economy is divided into four sectors:
Primary Sector
This sector includes agriculture, mining and forestry. The extraction of raw materials and harvesting of natural products from the earth.
Secondary Sector
The next step comprises the making of things, such as manufacturing, construction and processing.
Tertiary Sector
This is the services (intangibles) sector and includes financial services, consultancy, retailing, entertainment, and professional services.
Quaternary Sector
This sector, which is also known as the “Knowledge Sector,” is at the forefront of innovation, specializing in research and development, IT, AI, businesses consulting. It propels the economy with new ideas.
The delineation of market sectors is increasingly influenced by technological innovation and shifting consumer preferences, leading to the emergence of new sectors and the evolution of existing ones.