On March 17, as news trickled through of the US Fed interest rate hike, global markets responded with positive springs from their relatively oversold positions. both Indian benchmark indices - the NSE and the BSE - climbed 1.84% each, with one of the top gainers being HDFC Ltd which jumped 5.4% on the day. except for IT every sectoral index on the NSE closed in the green, with Realty leading the pack at 3.13% followed closely by Financial Services at 2.77%.Adding Content to the Canvas

diligent dues

HDFC was not alone in its ascent on March 17 as a host of other financial service stocks saw significant gains. this is in line with the market revival of sorts since March 8, with a look at the biggest gainers since then, throwing up plenty of banks and financial service companies in addition to petrochemical and metal firms.

one factor that may be driving this optimism is the fact that India’s monthly debit-bounce rate was at its lowest in February 2022 since May 2019. debit-bounce rate refers to the percentage of automated EMI payment transactions that fail due to insufficient balance in the corresponding bank account. a lower rate implies that more loans are being paid back on time, which in turn improves the ‘asset quality’ of the banks and allows them more working capital to invest and grow. in February 2022, the bounce rates were 22.4% of transactions by value - marginally above the average levels of around 21.5% seen during the pre-pandemic period of February 2018 - February 2020.