Recent correction may be an opportunity to enter bank stocks

PSB stocks have outperformed private rivals, and momentum looks strong

The largest sectoral component of the Nifty50, the banking and financials sector, has a weighting of 37.2 per cent, with banks accounting for over 25 per cent.

Banking itself is tracked by the Bank Nifty, covering the largest players, while two other indices track private banks and public sector banks (PSBs). The Nifty is highly correlated to the banking sector, and specifically the Bank Nifty, with the six largest stocks in the Bank Nifty all included in the Nifty.

The banking indices have far outperformed the Nifty over the past year, past month, and past week. The Nifty has moved