Weakness in banking stocks is weighing on overall market performance

the asset quality problem and tighter Reserve Bank of India norms around bad loan disclosure would lead to drop in earnings at banks in the coming quarters

The weakness in banking stocks is weighing on overall market performance. The financial sector accounts for a third of the weight in the benchmark Sensex and Nifty indices. The Nifty 50 index is down nearly eight per cent or 880 points from its all-time high of 11,130 on January 29. The bulk of the decline is on account of a slump in share prices of the leading banks, including State Bank of India (SBI) and ICICI Bank. Four of the five biggest losers on the Nifty since January 29 are bank stocks.

The Bank Nifty index, which has high correlation