In short
- A cyclical stock closely follows the economy.
- A defensive stock often has steadier business.
- These words describe a tendency: they guarantee no behaviour of the share price.
The two families
| Cyclical | Defensive | |
|---|---|---|
| Business | Sensitive to the economy | More regular needs |
| Results | Can vary sharply | Often steadier |
| Example sectors | Mining, construction, tourism, real estate | Telecoms, food, healthcare |
This classification is general. The same company can have both types of business.
Why some businesses are cyclical
- Mines depend on world metal prices.
- Construction and cement depend on public and private projects.
- Tourism reacts to health, economic or geopolitical crises.
- Real estate depends on credit, incomes and public support.
An example with figures
Here are two made-up companies in a difficult year:
| Company | Sales | Profit |
|---|---|---|
| A, rather cyclical | −20% | −50% |
| B, rather defensive | −2% | −3% |
Company A has high fixed costs, so a fall in sales weighs more on its profit. This is called operating leverage. In a recovery year, the effect can work the other way.
The real case of mining in 2026
According to the BMCE Capital Global Research study reported by Infomédiaire, mines strongly drove the rise in listed companies’ profits in the first half of 2026. See our article on first-half profits. On October 30, by contrast, Boursenews reported a fall in mining stocks, as precious metals dropped.
The limits of these labels
- A “defensive” stock can still fall, for example because of a price seen as too high, regulation or heavy debt.
- A price looks ahead: it can rise before business recovers, or fall before it declines.
- A company changes: an acquisition can alter its profile.
This guide presents a general classification. It does not say which sector to choose or when.
Frequently asked questions
Are banks cyclical?
They are linked to the economy through lending and the cost of risk, but their profile depends on each bank and the period.
Is there an official list?
No. The exchange publishes sectors, but “cyclical” and “defensive” remain analysis terms.
This article is for information and educational purposes only. It is not investment advice or a recommendation to buy or sell any security. Investing in shares involves a risk of capital loss. Check figures against official sources (Casablanca Stock Exchange, AMMC) and consult a licensed professional. Read the full disclaimer.
