Sensex Trades Marginally Higher; Dow Futures Up By 223 Points

The government, however, will continue to hold a majority stake in India's largest lender, State Bank of India, which is seen as a 'strategic bank' for implementing initiatives such as expanding rural credit.

India's deepest economic contraction on record caused by the pandemic is driving the push for bolder reforms. The GOI wants to overhaul a banking sector reeling under a heavy load of non-performing assets, which are likely to rise further once banks are allowed to categorize loans that soured during the pandemic as bad.

How this pans out remains to be seen. Meanwhile, stay tuned for more updates from this space.

Speaking of the banking sector, check out the monthly returns of major sectors for the month of March and October 2020 in the chart below.

In the chart above, you can see that banks were among the major losers with a cut of 34% in the month of March.

Cut to October they are the biggest gainers for the month with 11% returns!

If you're interested in knowing what could be the reason behind such a change in sentiment, you can read about it in one of the editions of Profit Hunter: Banks are booming in a COVID World.

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Disclosure: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research ...

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