Q4 impact: Bank stocks slump up to 32% in 3 months, but brokerages bet on SBI, HDFC Bank, 6 more stocks. Check why

The banking sector is currently facing headwinds from FII outflows and margin pressure, but Q4 results are expected to provide clarity and potential catalysts. DII buying could provide some support against FII selling.

Consider a 'buy on dips' strategy for select large-cap banking stocks with strong fundamentals, anticipating a potential rebound post-Q4 results and improved FY27 outlook.

For Indian markets, this story mainly matters for SBIN, HDFCBANK, ICICIBANK and the Banking pocket. The current signal is bearish, so traders should look for follow-through in price, volume, and sector breadth instead of reacting to the headline alone.

Watch whether the next market session confirms the setup described here: Brokerages are betting on this stock despite sector slump. Brokerages are betting on this stock despite sector slump. Also track volume confirmation, sector participation, and whether the move holds beyond the first reaction.

• •Banking stocks have slumped up to 32% over three months, underperforming the Nifty.
• •Reasons for the slump include FII outflows, rising oil prices, and rate concerns.
• •Brokerages remain selective, backing SBI, ICICI Bank, and others despite margin pressure.
• •Q4 results and FY27 outlook are identified as key triggers for the sector’s recovery.
• •Risk flag: Continued FII outflows