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Glossary · PSX term

Sector rotation.

Sector rotation is the shift of money from one industry to another as conditions change.

Definition

Investors may move toward sectors expected to benefit from the current cycle, such as banks when interest rates rise or exporters when the rupee weakens. Rotation can lift some sector indices while others lag, even within the same overall market.

Worked example

If rates rise, money may rotate from cyclicals into banks like HBL and MCB that earn more on higher rates.

Related on PSX Clarity

Term
Sector index
Term
Interest-rate sensitivity
Term
Market breadth

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