Indian stock market rebound in March fails to lift tech, media, FMCG and other 3 sectors out of bear grip

Indian stock market: Despite weak global cues continuing to weigh on global markets, Indian markets have shown strong resilience in March, recovering some lost ground after February's rout and outperforming the majority of the global peers. 

Positive domestic macroeconomic factors and easing concerns over valuations, especially in large-cap stocks, have brought optimism to the market, attracting investors back into equities and driving a strong recovery in beaten-down counters.

The market, which had been dominated by bears for the last five months, has finally settled, leaving room for bulls to intervene, helping front-line indices to back above crucial levels.

In today’s session (March 20), the Nifty 50 crossed the 23,000 mark for the first time since February 19, reaching 23,071, following the US Federal Reserve’s decision to retain its projection of two rate cuts for the current calendar year. Likewise, its peer, the Sensex, also topped the 76,000 mark for the first time since mid-February, reaching 76,013.

Both indices are now up over 3.50%, marking their biggest monthly gain since June 2024 (the election results month), when they surged nearly 7%.

Notably, the rebound came even as overseas investors remained net sellers in the current month, taking another ₹26,000 crore through exchanges. However, the pace of selling slowed compared to previous months, with continued support from domestic institutional investors absorbing the impact of FPI outflows.

The sharp correction in the US Dollar Index, which is now trading near a five-month low, is also supporting the rally in domestic stocks.

Despite a decent recovery in the markets, some sectors are still struggling to regain momentum, trading 20% below their peaks. On Dalal Street, corrections are defined as losses of 10%, while bear markets are marked by drawdowns of 20% or more.

Nifty Media leads declines, realty and energy struggle

One of the worst-hit sectors in the recent correction was Nifty Media, which is still trading with significant losses—40% below its recent high—as the weak performance of all 10 constituents has made the index the top laggard.

Nine out of ten stocks in the index, including Dish TV India, PVR INOX, Den Networks, Zee Entertainment, and Sun TV Network, are down between 25% and 68% from their respective one-year highs.

Realty stocks, on the other hand, are also trading with significant losses. While they showed some recovery in the recent market pullback, they are still struggling to regain momentum as investors remain underweight on realty on concerns over a slowdown in the Indian economy and rising raw material prices including steel and aluminum. At current levels, Nifty Realty is down 26% from its recent highs.

Meanwhile, energy stocks, including Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum, have shown some pullback in March following a sharp drop in crude oil prices. However, all 40 constituents in the Nifty Energy index are trading with losses ranging from 20% to 60% from their 52-week highs, causing the Nifty Energy index to trade 26% lower from its recent peak. 

Auto and IT stocks face pressure; FMCG is in a prolonged slump

Auto stocks have also been hit hard, as rising food prices and falling wages in urban India are causing consumers to delay vehicle purchases. Additionally, fears of escalating tariffs on auto imports to the U.S., coupled with automakers expecting another muted sales year in FY26, are also weighing on sentiment.

Investors appear to be losing interest in tech stocks, as rising global trade tensions, initiated by Donald Trump, could impact growth in the U.S., where Indian IT companies have significant revenue exposure.

This expectation has also led brokerages to maintain a cautious view on the sector, with Citi recently expressing concerns about Indian tech companies.

The Nifty FMCG index, which includes Nestlé and HUL, has closed in the red for the past five months, marking its longest monthly losing streak on record. 

The once high-flying FMCG stocks, known for their defensive nature, have been falling to multi-month lows amid slowing consumer demand, rising input costs, and shifting spending patterns. Though there was some recent recovery, the index is still stuck in a bear market.

All three including Nifty Auto, Nifty FMCG and Nifty IT are trading with cuts of up to 22% from recent highs. 

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.