Banking, IT stocks winning bets over 10 years, but rarely move in step

An analysis shows the average return divergence between these two sectors during the past decade has been 37%

Banking and IT stocks have proved to be the winning bets over a 10-year period. Both have generated superior annualised returns between 2012 and 2022 vis-à-vis the benchmark Nifty 50 index. However, both played Russian roulette or rarely moved lockstep.

An analysis done by Motilal Oswal shows that the average return divergence between these two sectors for the past decade has been 37 per cent. “Over the past decade (CY12-22), while both Nifty Bank and Nifty IT outperformed Nifty 50, their performances remained highly volatile and divergent.

The quantum of relative performance gap between the two sectors was