Buyers waiting for better times ahead for banking stocks: Deven Choksey, KR Choksey Securities

In a chat with ET Now, Deven Choksey, MD, KR Choksey Securities, talks about the banking sector stocks.

ET Now: What do you make of the recent underperformance by the banking space?

Deven Choksey: There is nothing fundamentally against the banking stocks at this point of time. The recent phenomenon may have to do with the sectoral rotation happening at this point of time, wherein the larger amount of money is going into some of the cyclicals, particularly in the commodities. We have seen that there has been a considerable inflow of money in both metals and cement.

As far as deployment is concerned, many of these counters have seen good inflows. To a greater extent, the money has come from some of the areas including banks, and they have run up very sharply. As an example, we can cite State Bank of India which has moved up from 1500-1700 levels in the recent past to close to 2800-2900 levels now. From that perspective if you look at it, some amount of profit booking is natural. Also, some amount of stagnation or sideways movement is par for the course.

I do not see anything fundamentally wrong with any of the banks. On the contrary, people are waiting for better times ahead for banks. Yes, some of the announcements like write-off or waiver of farm loans could probably affect the rally to a certain extent. But nothing is wrong there fundamentally.