Correction in banking space could be on hopes of a new government: Manish Sonthalia

In a chat with ET Now, Manish Sonthalia of Motilal Oswal shares his views on the banking space.

ET Now: How is everything in the banking space moving up in a synchronised manner?

Manish Sonthalia: As a proxy to the revival to investment cycle, banks are a proxy play. The markets are just lifting banks all along, whether it be PSU banks or private sector banks. It would be the private sector banks which at least have some fundamentals to support them.

For the public sector banks, valuations are beaten down, but NPA cycle is still yet to bottom out. There could be trading plays, but private sector banks are getting rerated on the hope that investment cycle would revive post the coming of new government.