According to Jefferies, India's most widely-owned sectors, financials and IT, have shown an inverse relationship nearly 70% of the time in the past 14 years. The reason for this lies in macroeconomic trends; banks tend to outperform during times of favourable macros like stable and strong INR, falling yields and strong growth, whereas IT tends to outperform during weakening rupee, rising yields/inflation, and weaker macros. Jefferies' model portfolio is overweight lending financials by 2 ppt while IT is the largest underweight by 4 ppt.

Source: Economic Times June 10, 2023 14:12 UTC