New Delhi, May 27 -- The banking sector remains in focus as the Bank Nifty index hovers around the 55,000 mark, with investors assessing whether banking stocks - particularly PSU lenders - are poised to lead the market rally going forward.

While banking stocks have remained under pressure in recent months, analysts believe the outlook for the sector will largely depend on interest rate trajectory, bond yields, deposit mobilisation, and the evolving geopolitical situation in West Asia.

The Bank Nifty index has underperformed the benchmark Nifty 50 over the past month. The banking index has fallen more than 2% during the period, compared with a 0.54% decline in the Nifty 50.

However, on a year-to-date (YTD) basis, the gap narrows, with B...