The stock market on October 4 is navigating through a volatile environment as Middle East tensions pushed oil prices higher, surging over 5% to $77.96 per barrel. This rise in oil prices is expected to favor key oil companies, particularly ONGC, which stands to gain from the sharp rise in Brent crude, up 5.5%. At the same time, broader market sentiment is being shaped by strong US services data and the anticipation of US jobs data for September.

As oil prices continue to rise, Bank of Baroda is also positioned to benefit, given its strong quarter performance, with advances up 4.8% QoQ. Meanwhile, other sectors such as financial services are facing challenges. Both Bajaj Finance and M&M Financial are struggling with weaker-than-expected second-quarter results, leading to caution among investors.

In the US, market performance overnight was mixed. The Dow fell by 0.44%, S&P 500 slipped by 0.17%, and Nasdaq dropped marginally by 0.05%. Additionally, the UST 10-year yield rose by 7 basis points to 3.85%, reflecting growing concerns over inflation and interest rate hikes. The Dollar Index also strengthened by 0.23% to 101.91, signaling a more robust greenback.

The Institute for Supply Management's (ISM) Services Index reported a reading of 54.9, significantly higher than the 51.7 consensus, marking its highest level since February 2023. This data has increased market optimism regarding the health of the US economy, further adding to the volatility.

Jobs Data and Market Reactions

Looking ahead, the market is waiting for the highly anticipated US jobs data for September, expected to release tonight. The range of expectations is quite broad, spanning from 70k to 220k, with a median estimate of 143k jobs added in the last month. A stronger-than-expected number could reinforce the view of a resilient US economy, while a weaker number may increase speculation about future interest rate cuts from the Federal Reserve.

Oil stocks like ONGC are positioned to benefit not just from the rising oil prices but also from increasing global demand and supply concerns triggered by Middle East geopolitical tensions. As Brent crude surged to $77.96 per barrel, the energy sector is seeing heightened investor interest.

Meanwhile, Alembic Pharma continues to see positive momentum after receiving US FDA approval for Alcaftadine Ophthalmic Solution (OTC), further strengthening its foothold in the healthcare industry. CESC, on the other hand, is gaining attention after acquiring Bhojraj Renewables Energy for ₹108 crore, positioning itself strategically in the renewables sector.

Market Trends and Global Outlook

Internationally, markets are showing mixed reactions. In Europe, CAC slipped by over 1%, while the Asian markets saw mixed performances, with Hang Seng falling by over 1% and Kospi rising by nearly 1%. The rising oil prices coupled with strong ISM services data have created both opportunities and risks for investors.

Gold continues to hold steady at $2,658/oz, providing some safety for investors amid inflation fears, while the Dollar Index climbed to 101.91, reflecting strengthening demand for the US dollar. This further contributes to a cautious market sentiment.

Sundaram Clayton and Avenue Supermarts are also in focus. Sundaram plans to raise ₹400 crore through a QIP, while Avenue Supermarts reported 14.1% year-on-year revenue growth, adding six new stores and drawing interest from long-term investors.

Another stock to watch is Ola Electric, which recently launched its BOSS campaign during the festive season, offering its S1 electric scooters at attractive pricing starting at ₹49,999. With fuel prices on the rise, the demand for electric vehicles (EVs) is expected to increase, further boosting Ola Electric’s prospects.

Conclusion

As market volatility persists, investors should pay close attention to oil stocks such as ONGC and Bank of Baroda, which stand to benefit from the rising oil prices and favorable economic data. On the flip side, companies like Bajaj Finance and M&M Financial might face pressure due to weaker-than-expected quarterly results.

The market remains focused on the upcoming US jobs data, which could significantly influence market movements, along with rising oil prices and geopolitical tensions in the Middle East. Investors are advised to stay informed by checking out the latest IPO updates and market news on Finance Saathi and following CA Abhay's Telegram Channel for daily trading tips.

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