Amid today’s stock market crash on Monday, 11 May, banking stocks fell like ninepins, while IT emerged as a defensive bet, underscoring the divergence in investor behaviour. Both banking and tech segments are among the heavyweights in the Nifty 50 index.
The flagship Nifty Bank index tumbled 1.70% in intraday deals today, as barring Bank of Baroda (BoB), all stocks faced intense selling pressure. State Bank of India (SBI) emerged as the biggest laggard as it extended its post-earnings decline. The PSU stock had crashed 7% on Friday after its Q4 results missed expectations.
Meanwhile, private sector lenders like HDFC Bank, ICICI Bank, Kotak Bank and Axis Bank also declined up to 1.5%.
On the flip side, shares of IT stocks remained on firm ground. The index was trading higher by 0.40% at the time of writing this report. Coforge, Infosys, Tata Consultancy Services (TCS) and HCL Technologies were among the top gainers.
Why are bank stocks falling today?
The decline in bank stocks can be read as a mix of earnings slowdown and economic uncertainty as investors assessed the comments made by Prime Minister Narendra Modi last week.
Earnings prints from a few large lenders have shown margin compression and a modest uptick in slippages, and the market is repricing the sector accordingly, said Harshal Dasani, Business Head at INVasset PMS.
When net interest margins (NIMs) come under pressure and credit costs tick higher, the valuation multiples that banks earned over the past two years start to look less supportable, he said.
After the strong rise in banking counters, especially PSU banks, in the last 18 months, the current earnings statements are failing to justify this rally, according to experts.
“In banking, we’ve seen the PSU banks outperform in the last 18 months compared to the private banks. And post that, with the set of numbers that have come out, it’s not enough to sustain the valuations,” said independent market expert Ambareesh Baliga.
Furthermore, PM’s address added a layer of uncertainty. Dasni said there wasn’t anything explicitly negative in his comments, but markets read between the lines for fiscal signals and policy direction. “When the tone feels defensive or cautious, risk appetite contracts, and banks, as the most liquid proxy for the domestic economy, take the first hit. This is not a structural concern about the banking franchise; it is a cyclical repricing as earnings visibility softens,” he noted.
What’s powering IT stocks?
IT stocks, on the other hand, are witnessing some value buying after remaining on the back foot for the last two years. The IT pack tumbled over 12% in 2025 and another 22% in 2026.
“The sector has underperformed for nearly two years, valuations had compressed meaningfully, and positioning was light. When broad markets sell off, capital rotates into pockets where the downside feels capped. IT fits that bill: dollar revenues provide a natural hedge when rupee weakness is in play, and the AI transition narrative, however early, is starting to shift sentiment,” Dasani added.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
