Banking stocks underperforming broader markets but valuations reasonable: What should investors do?

The market has been punishing banking stocks for several months now. Recently, the Bank Nifty went below its 200-day moving average, a key technical support ( see chart). Therefore, this weakening trend is expected to continue for some more time. Sentiments have been weak towards the sector mainly because periods of rate increases are not good for banks. Increase in yield will result in fall in bond prices and this will pull down their