Back in vogue: Banks, financial services stocks lead market recovery

Market participants are hopeful the asset quality deterioration of banks and NBFCs would not be to the extent expected earlier, and that the lending books may recover fast enough

Banking and financial services stocks are among major gainers in the market rally in the past month, with 11 of the top 25 gainers in the NSE 100 belonging to this pack.

Nine of these have gained in double digits, with Bandhan Bank, Bajaj Finance, and Bajaj Finserve surging the most in the past month. The NSE 100 rose 6.1 per cent, while the Nifty Bank gained 8.5 per cent during the period.

According to experts, excess liquidity drove flows into beaten-down banks and financial services firms in the past few weeks. Market participants are hopeful the asset quality deterioration