With the Indian stock market heading towards a fifth consecutive monthly decline in February, investors will keep a keen eye on the possibilities of a recovery in March.
With the Indian stock market heading towards a fifth consecutive monthly decline in February, investors will keep a keen eye on the possibilities of a recovery in March.
In seven out of the last 10 years, the NSE Nifty 50 has closed in the green in March. The benchmark index has given an average monthly return of 2.3% during this period.
This historical data, which excludes the immediate period following the Covid-19 outbreak, offers some glimmer of hope as the Indian market is on course to log its longest losing streak since 1996 with the monthly decline in February.
The broader markets have shown a mixed performance in March, as per the data of the past decade. The Nifty Midcap 100 and Smallcap 100 have closed in the green during the month in five out of the last 10 years.
In the same period, the Midcap has given an average return of 2.7% and the Smallcap's average return has been 2.3%, excluding the Covid-triggered fall.
However, the historical performance of the sectoral indices in March offer a grim picture. The Nifty Auto has closed in the red in seven out of the last 10 times, with average decline of 2.6%, as per the data shared by JM Financial.
The Nifty IT has logged a monthly decline in March in six out of the last 10 years, with an average decline of 1%. The Nifty Pharma has declined in five out of the last 10 years in March, while giving a modest average return of 0.9%, the data showed.
The chart below highlights the performance of the Nifty indices in March in the last 10 years.
Best Performing Stocks
Some of the key seasonal stocks in March are Navin Fluorine International Ltd., IndiGo parent InterGlobe Aviation Ltd. and APL Apollo Tubes Ltd., which have given average returns of 9%, 6.6% and 5.8% during the month in the last 10 years respectively, according to the data.
IPCA Laboratories Ltd., KEI Industries Ltd., Nestle India Ltd., SRF Ltd. and Page Industries Ltd. are also among the key performing stocks in the month.
The above stocks have closed in the green in seven out of the last 10 times in March, and have given average returns in excess of 4%.
Worst Performing Stocks
HFCL Ltd., RBL Bank Ltd. and Housing & Urban Development Corp. are among the seasonal low-performing stocks in March, with average monthly declines of 9.6%, 8.2% and 7.4% respectively in the last 10 years, according to JM Financial.
Vodafone Idea Ltd., Apollo Hospitals Enterprise Ltd., Coal India Ltd., Mahindra & Mahindra Ltd. and Bharat Forge Ltd. are also among the stocks that have performed poorly in March over the last 10 years.
The above stocks have closed in the red seven out of the last 10 times.
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