Historical Trends Suggest a March Revival in Indian Stock Markets

Is a revival in the stock market expected this month? Historical data shows there's a strong chance of the same happening in March. Past data going back a decade shows that excluding the Covid year of 2020, March is typically the best time for Indian equities, with Nifty 50, Nifty midcap 100, and Nifty smallcap 100 indices posting average returns of 2.3%, 2.9%, and 2.6%, respectively, a report by Yes Securities showed.

Understanding the Market Dynamics

Another report by Samco Securities said that most of the bad news relating to the ongoing tariff wars between the US, China, Mexico, Canada, and some other countries and blocks have already been priced in. The best Nifty return in March of any year in the past 10 years was 11% in 2016 and the worst was 4.5% in 2015.

"Analyzing data from the last 10 years (excluding the Covid year), a clear revival trend emerges across key indices. Most sectoral indices also post positive returns, except Auto and IT, which typically remain flat," the report by Yes Securities said. However, during the Jan-March quarter of every year, Indian indices typically underperform, the study warned.

Current Market Scenario and Future Predictions

So far this year, the Nifty is down 5%, while the Nifty midcap 100 index is down 14% and the Nifty smallcap 100 has lost 17.4%. On the BSE, the Sensex has lost 5.3% so far in 2025. On Friday, Nifty closed at 22,553 points, while the Sensex closed at 74,333 points.

"While seasonality provides a strong directional cue, we do not rely on it blindly. Additional supporting factors strengthen the case for a turnaround," the report said. Analysts at Yes Securities pointed out that market breadth, the ratio of the number of stocks that are closing higher to the ones closing lower, is of late improving across broader indices. They also said that financial stocks, one of the key sectors, is showing sustained strength.

"Considering the above-mentioned rationale, ignoring the potential for a market rebound in March would be difficult. As history suggests, this seasonal tailwind, coupled with improving market dynamics, offers a compelling opportunity," the report noted. Another report by Samco Securities also pointed out that tariff wars, between the US and some of its biggest trading partners, have already been priced in and it's time to buy big.