Nifty 50 gains 5% in March; which stocks should investors buy in a rising market? Here’s what experts say

After suffering sharp losses from October to February, the Indian stock market is witnessing healthy gains in March, fueled by improving domestic macroeconomic data, no major shocks related to US tariffs so far this week, and relatively cheaper stock valuations.

The Nifty 50 has jumped 4.8 per cent this month as of March 20, with stocks such as BEL, Mahindra and Mahindra and Dr. Reddy's Labs witnessing healthy gains in the last few days.

The long-term market outlook remains positive, driven by expectations of sustained economic growth and a strong influx of retail investors.

According to Morgan Stanley, the Indian economy may expand to $4.7 trillion in 2026, making it the fourth largest in the world behind the US, China, and Germany. In 2028, India will overtake Germany as its economy expands to $5.7 trillion.

However, the market may continue witness volatility due to persisting global uncertainty due to US President Donald Trump's tariff policies and geopolitical tensions.

Is the market ripe for a V-shape recovery?

The fresh buying momentum in the domestic market has raised speculations that it may see a V-shape recovery and could quickly get closer to record-high levels.

However, experts say a V-shape recovery is unlikely.

Vikas Jain, the head of research at Reliance Securities, believes the Indian stock market might see a U-shaped recovery in the domestic market with a period of consolidation in between instead of a V-shaped recovery.

He said the major impact of the US reciprocal tariffs on particular sectors will be observed when they come into effect on April 2. However, he is bullish on the market and expects the Nifty 50 to reach near-record-high levels by December, led by further rate cuts by the Reserve Bank of India, a boost in demand due to the income tax cuts announced in the Union Budget, and a recovery in corporate earnings.

Jayesh Faria, Director and Regional Head – West at Motilal Oswal Private Wealth, believes the worst of the correction is behind us. However, a phase of time correction may persist in case of weaker Q4 and Q1 earnings. The market could remain flat or see a further 5 per cent decline in the near term.

For existing investors, Faria said it’s best to stay invested. However, a new investor looking to allocate ₹100, can either invest fully now or split your investment— ₹50 now and the remaining ₹50 over the next 30-60 days.

Shrikant Chouhan, the head of equity research at Kotak Securities, said at this juncture, where there are still many uncertainties in tariff trades, investors should consider investing in strong companies.

However, Chouhan emphasised that investors should also consider reducing weak investments from their portfolios to gain a better edge because the market trend is indecisive and making a series of lower tops and bottoms.

"The ideal strategy should be to look for reducing weak or leveraged positions at the resistance level," said Chouhan.

"Selling and creating cash is not the ideal strategy at the moment because the indices have fallen to extreme levels, and at the current levels, if we consider the global macros as well as the domestic macros, they are turning positive or supportive for the emerging markets which could mitigate the downside for the market," Chouhan said.

Which stocks should investors buy in a rising market?

Experts suggest investors should buy quality stocks at this juncture for the long term.

"This is a good time to start building your portfolio with a bottom-up approach, focusing on large-cap and mid-cap stocks," said Faria.

Jain of Reliance Securities is positive on Axis Bank, Protean eGov Technologies, CDSL, Bharat Forge, Godrej Properties and Colgate.

Ajit Mishra, SVP of research at Religare Broking, said with the market rebounding after a recent correction, investors should view this as an opportunity to accumulate quality stocks at attractive valuations.

"While global uncertainties continue to contribute to volatility, recent government and central bank measures are expected to support economic growth. In this environment, a long-term investment approach is advisable, with moderate return expectations and a focus on fundamentally strong, consistent performers," said Mishra.

"Priority should be given to structural plays available at reasonable valuations. Considering these factors, stocks like HDFC Life, CAMS, HDFC Bank, Reliance, and NCC remain solid additions for sustainable growth. Instead of chasing short-term momentum, investors should aim to build a resilient portfolio for the future," Mishra said.

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Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.