In a turbulent March 2026, marked by an escalating West Asia crisis and surging oil prices, mutual funds (MFs) strategically increased their stakes in seven of the top ten retail-favorite stocks. This proactive buying occurred even as domestic markets experienced their sharpest monthly decline since March 2020.
Data compiled by Business Today from PRIME Database figures reveals that prominent stocks like HDFC Bank Ltd, Tata Power Ltd, YES Bank Ltd, Suzlon Energy Ltd, Tata Motors Passenger Vehicles Ltd, Indian Railway Finance Corp Ltd (IRFC), and Reliance Power Ltd all witnessed significant MF buying during the month. Conversely, Vodafone Idea Ltd, Tata Steel, and Jio Financial were among the stocks where MFs reduced their positions.
The overall net mutual fund buying across these ten stocks totaled an impressive Rs 17,565.87 crore. HDFC Bank emerged as the primary focus, attracting a staggering Rs 17,250.44 crore in MF inflows. The bank, which had 41.06 lakh retail investors by the end of the March quarter, saw funds 'buying the dip' despite recent market headwinds.
Other retail darlings also benefited from MF interest. Tata Power garnered Rs 442 crore in inflows, while YES Bank, with over 60 lakh retail investors, saw purchases totaling Rs 378.87 crore. Suzlon Energy attracted Rs 221.64 crore, and Tata Motors PV registered Rs 156 crore in MF buying. IRFC and Reliance Power also experienced some, albeit negligible, mutual fund acquisitions.
On the selling side, mutual funds offloaded Rs 423 crore worth of Vodafone Idea shares, Rs 400 crore of Tata Steel shares, and Rs 106 crore of Jio Financial shares, reflecting a strategic divestment from these holdings.
March 2026 represented the fourth consecutive month of decline for the Nifty index, which slid 11.3 percent. The index oscillated 2,706 points before closing 11.3 percent lower at 22,331, marking its steepest month-on-month decline since March 2020, largely attributed to the geopolitical tensions in West Asia.
Looking ahead, market analysts are closely monitoring the potential resolution of the US-Iran conflict. Kotak Institutional Equities noted,
"We doubt if Iran or the US has much to gain from a prolonged conflict. A prolonged war may (1) further deepen the distrust between Iran and the US, (2) potentially drive Iran to pursue nuclear deterrence as a ‘safety’ guarantee, (3) increase economic hardships for US households through higher inflation and interest rates... (4) reduce the appetite among other countries for US assets and debt and (5) further erode public support for the war in the US, with political ramifications in the mid-term polls in November 2026."This sentiment underscores the broader economic and political considerations influencing market stability.