Seasonality may come to the rescue of bulls After a volatile February, equity bulls are hoping for better tidings next month. According to JM Financial, the Nifty 50 index has shown positive seasonality in March. The benchmark has closed in the green during the month seven times in the past decade, averaging a median return of 1.3%, JM analysts write. Jefferies analysts share the optimism and are betting on a near-term bounce, saying the recent selloff overlooks positive triggers such as the rate cut, uptick in government spending, consumption boost from tax cuts and easing valuations. Banks’ asset quality holding up even as loan growth slows India’s loan growth slowed to 12% year-on-year, according to the latest RBI data, with weak demand for company loans persisting. However, Kotak analysts suggest that concerns over asset quality stress may be overdone, as banks have tightened credit filters, especially for unsecured loans. This view offers a silver lining for investors, despite the Nifty Bank index’s 4% drop so far this year, mirroring the benchmark Nifty 50’s performance. Financial stocks will be watched after the central bank rolled back additional risk weights on loans to better-rated non-banking financial companies. A selloff usually means heightened volatility, but this time seems different. The India VIX has fallen six straight sessions while the Nifty 50 has shed more than 1.5% in the same period. This could indicate that traders are not panicking and rushing to buy hedges as they feel a bounce could be around the corner. Whether the optimism is justified should be clear over the next week. @Bloomberg