Stock market: Nifty, Sensex kicks off March on strong note. History suggests further gains likely

March has historically been a positive month for the stock market, with the Nifty50 ending higher in seven of the last 10 occasions. While the average return for the 10 past occasions was a tepid 0.3 per cent, if one ignores March 2020's 23 per cent selloff -- which was mainly on account of onset of Covid-19, the average Nifty return for March stands at 2.9 per cent, JM Financial said in a note. 

At the time of writing this story, Nifty was tradinf at 22,292.75, up 309.95 points or 1.41 per cent. The BSE Sensex was trading at 73,530.93, up 1041 points or 1.43 per cent. 

In the case of midcap stocks, history suggests the benchmark midcap index delivered positive returns six times, with an average return of 0.5 per cent. Ignoring the Covid year, the average return for the midcap index in March has been 3.9 per cent. The index in fact outperformed Nifty with an average outperformance of 0.2 per cent.

Among sectoral indices, NSE FMCG has been the best sector for March, rising in seven of 10 occasions with an average return of 2.2 per cent. NSE Auto has been the worst index, falling on seven occasions with an average drop of 2.5 per cent. 

NSE MNC index has outperformed Nifty seven times, with a average outperformance of 0.4 per cent. The NSE Auto index has underperformed Nifty with an average underperformance of 2.8 per cent.   

Adani Enterprises, Navin Fluorine International, JK Cement, Deepak Nitrite and InterGlobe Aviation are a few F&O stocks that have exhibited a stronger seasonality factor in March and have 70 per cent or more probability of delivering over 6 per cent returns, JM Financial said. 

On the other hand, IRCTC, Indiamart Intermesh, Polycab India, RBL Bank, Apollo Hospital are some of the stocks with high seasonality factor and 70 per cen or more probability of falling over 6 per cent, the brokerage said.