Foreign institutional investors bought a net $495 million in Indian banks, while selling a net $791 million in pharmaceutical and biotechnology shares this month as of March 15, regulatory data shows, with IndusInd Bank and Kotak Mahindra Bank leading.
As a result, lenders have been one of the top performers this month, during a month in which the NSE has hit a slew of record highs, including most recently on Monday.
The NSE's bank sub index up about 15 percent so far this month, outperforming the nearly 5 percent gain in the NSE.
Analysts have attributed the strong interest in domestic oriented stocks such as banks on expectations the opposition Bharatiya Janata Party would win elections due next month given its perception as being more business-friendly.
Optimism about the domestic economy has also played a role, given easing inflation and a sharply narrower current account deficit.