The underperformance and correction in banking stocks has led to weightage of financials to touch a five-year low. Currently, the weightage of banking and financial services stocks on the Nifty is 33% as per the latest National Stock Exchange fact sheet. This, compared to a 38.45% weightage in April 2023, signifies a weightage fall of 5.45% to the current one.
Private sector banks lead to weightage cut
Shares of private sector banks and Nifty heavy weights such as HDFC Bank, Kotak Mahindra Bank, Axis Bank and IndusInd Bank have corrected sharply in the past few weeks.
Shares of HDFC Bank have corrected 15.5% year-to-date, making it the worst performing stock on the Nifty 50 after UPL.
Infact, all private sector bank constituents in the Nifty Bank, except ICICI Bank, have traded with losses this year, so far.
Banks and financials weightage on the Nifty has dropped from a recent high of 38.45% in April 2023 to 33.01% currently. This was last seen in 2019, resulting in the weightage for banking and financials to drop to a five-year low.
