look news india
New Delhi: The month of March 2026 was full of turmoil for the Indian stock market, but amid this decline, domestic mutual funds kept the buying lead. Despite geopolitical tensions and high bond yields, mutual funds were active in the secondary market and bought shares worth about Rs 1.13 lakh crore. Nearly 49 per cent of this total investment (₹55,413 crore) came in the financial sector alone, indicating their unwavering confidence in banking and financial stocks.
Buying the Dip: Bet on Financial and Consumer Stocks
In March, Nifty Bank (17% fall) and Nifty Financial Services (15.6% fall) saw their biggest monthly decline since March 2020. Despite this, mutual funds used this correction as a buying opportunity.
| Sector | Mutual Fund Investment (March 2026) |
|---|---|
| financial stocks | ₹55,413 crore |
| consumer discretionary | ₹16,366 crore |
| Telecom | ₹14,656 crore |
| IT stocks | ₹5,717 crore |
| Commodities | ₹4,883 crore |
The mathematics of market share and liquidity
Total assets (AUM) of mutual funds decreased from ₹ 51.29 lakh crore in February due to huge fall in the market. ₹46.6 lakh crore Remained. However, one positive aspect was that the share of mutual funds in the total market capitalization has increased. increased from 11.1% to 11.3% But reached.
Yield Pressure: India’s 10-year bond yield crossed 7%, raising concerns about mark-to-market losses on banks’ portfolios. The main reasons behind this were the rising prices of crude oil and the US-Iran conflict.
FII vs DII: Foreign investors withdrew ₹1.26 lakh crore
Unlike mutual funds buying, foreign institutional investors (FIIs) pulled out of the market. In March, FII invested around ₹1.26 lakh crore Sold the shares.
Best Seller: About ₹60,000 crore was withdrawn from the financial sector.
Reduction in stake: FII stake in Indian equities reduced to 15.5% 15.14% Remained.
Market correction and the way forward
In March both Sensex and Nifty 11.5% A decline of ₹ was recorded. Midcap and smallcap indices also fell by more than 10%. Experts believe that this aggressive buying by mutual funds is supporting the market at lower levels. This confidence of domestic investors could prove to be important for the market’s recovery amid efforts by RBI to save the rupee and tight liquidity conditions.