Rohit Srivastava, founder of Strike Money Analytics and Indiacharts, said investors should focus on smaller private banks to capture the next market rally.

This shift in strategy comes as the Indian equity market seeks new growth drivers. While large private banks have seen a weakening of their positions, Srivastava said the broader banking sector is currently in a bottoming phase.

Srivastava identified a Nifty bottom level at 23,262 [1]. He said the index has a target level of 26,000 [2], while other projections suggest a potential rally toward 25,000 [3]. A key support level for the Nifty is currently marked at 24,000 [4].

The analyst said the banking and defense sectors are positioned to lead the upcoming market movement. He said smaller private banks may offer better upside potential than their larger counterparts due to the current sector dynamics.

According to the analysis, the market's trajectory is tied to these specific sectoral recoveries. Srivastava said the focus on smaller institutions is a tactical response to the weakness observed in the heavyweights of the banking industry.

“The banking sector is bottoming out and could lead the next market rally.”

A pivot toward smaller private banks and defense stocks suggests a rotation in the Indian market. If the Nifty holds its support level at 24,000, investors may move away from stagnant large-cap banks toward high-growth mid- and small-cap financial institutions to drive portfolio returns.