Banking stocks have maintained a robust upward trajectory since September began, with eight lenders already setting new historical highs within the month. The benchmark index for Bank ETF HuaBao (512800) has also reached its highest point this year, underscoring the sector's standout performance amid broader market fluctuations.

Four converging forces are propelling the banking sector's strength.

First, fundamentals are improving, as the industry's net interest margin posted its first quarterly rebound in four years. Second, a re-rating of high-dividend appeal is underway, with state-owned major banks uniformly raising their dividend payout ratios to 31%. Third, policy catalysts are at play, including the release of the "15th Five-Year Plan" for building a financial powerhouse, alongside new real estate policy measures. Fourth, a style rotation is occurring, as risk-averse capital shifts from high-valuation growth stocks to low-valuation dividend plays.

Fund manager offers rapid analysis.

Feng Chencheng, fund manager of Bank ETF HuaBao (512800), points out that banking stocks ignited a fresh rally around the release of interim reports, which revealed stabilizing net interest margins, rising revenue, and steady asset quality. Over the long term, the sector is positioned in an earnings recovery cycle. In the ongoing rebalancing of market style and institutional positioning, the accelerated pricing of valuation repairs is becoming increasingly evident.

Feng further cautions that with domestic long-term bond yields continuing to decline and long-term liability funds facing an asset shortage, banks' dividend yields, mid-term earnings growth, and absolute valuation levels offer compelling reasons for allocation-driven capital to participate. Investors should pay close attention to the upward momentum driven by the sector's underweight positioning and long-term allocation demand.

The MACD golden cross signal has formed, indicating that the upward trend for these stocks may have further room to run.