The Indian stock market witnessed yet another day of turmoil as the Sensex and Nifty extended their losing streak for the sixth straight session on October 7, 2024. Despite an initial rally, the indices succumbed to global concerns, surging crude oil prices, and a weak investor sentiment driven by the escalating Middle East conflict.

By the close, the Sensex had dropped 638.45 points, or 0.78%, settling at 81,050, while the Nifty 50 tumbled by 218.80 points, or 0.87%, to finish at 24,795.80. Mid-cap and small-cap stocks took an even steeper fall, continuing their decline as investors offloaded shares amid fears of prolonged global uncertainty and rising oil prices.

The uptick in crude oil prices over the past week, driven by the geopolitical conflict in the Middle East, is particularly concerning for the Indian economy, which is heavily reliant on oil imports. Oil prices surged by more than 8% last week, putting additional pressure on the market, leading to a significant sell-off in energy-dependent sectors like PSU banks, healthcare, and telecom.

PSU Banks like Indian Overseas Bank, UCO Bank, Central Bank of India, Canara Bank, and Punjab National Bank fell more than 4% in trade. All constituents of the broader Nifty PSU Bank index are trading in the red, reflecting the general negativity surrounding the sector. The weakness in banking stocks mirrors concerns over rising interest rates and regulatory scrutiny.

Investors have seen their wealth erode rapidly, with the market capitalisation of BSE-listed companies falling by Rs 8.99 lakh crore to Rs 452.27 lakh crore from Rs 461.26 lakh crore in a matter of days. The rising Indian Volatility Index (Nifty VIX), which jumped by 6.7%, further indicated rising nervousness in the market, reflecting the unease among traders and investors alike.

In contrast, Godrej Properties reported a 3% YoY increase in booking value to Rs 5,200 crore for Q2FY25 and an impressive 89% YoY rise to Rs 13,800 crore for H1FY25. The company also saw cash collections increase by 68% YoY to Rs 4,000 crore during the quarter, indicating robust demand in the real estate sector.

Despite the overall market slump, IT stocks managed to register modest gains, with the Nifty IT index rising by 0.6%. Companies such as Infosys, Bharti Airtel, and M&M were among the top gainers, providing a glimmer of hope in an otherwise bleak trading session. The resilience in IT stocks was attributed to their defensive nature and the sector's ability to benefit from increased global demand for digital services amidst geopolitical unrest.

On the flip side, the biggest losers were NTPC, Adani Ports, SBI, Coal India, and Adani Enterprises, dragging the Nifty 50 further into the red. The sell-off in Adani Enterprises comes amid reports that the company is in advanced talks to acquire the Indian operations of Heidelberg Materials for Rs 10,000 crore. Following this news, Heidelberg Cement India rose sharply to its 52-week high of Rs 258.

In the healthcare sector, Nuvama Institutional Equities initiated a ‘Buy’ rating on Jubilant Pharmova with a target price of Rs 1,450, forecasting growth driven by the Ruby-Fill ramp-up and I-MIBG launch. Conversely, Lupin faced challenges as it received five observations from the US FDA following a pre-approval inspection at its biotech facility in Pune.

Vodafone Idea saw a sharp decline as the Department of Telecommunications reportedly issued notice over the non-payment of bank guarantees for past spectrum auction dues. Similarly, Ola Electric Mobility faced backlash, declining over 8% after a contentious exchange between its CEO and a comedian highlighted service issues with its scooters.

In the financial sector, RBL Bank's total deposits increased 20% YoY to Rs 1.1 lakh crore in Q2FY25, while gross advances grew 15% YoY to Rs 88,443 crore. Meanwhile, IndusInd Bank saw its net advances rise 13% YoY to Rs 3.6 lakh crore, and deposits grew 15% YoY to Rs 4.1 lakh crore.

Sharekhan retained its 'Buy' call on Zydus Lifesciences with a higher target price of Rs 1,268 per share, indicating a potential upside of 20.2%. The brokerage believes the company is well-positioned for significant growth, driven by strategic partnerships and active clinical programs, expecting the firm's revenue to grow at a CAGR of 13% over FY25-27.

In automotive news, retail sales for the industry declined 9.3% YoY to 17.2 lakh units in September, with two-wheeler sales down 8.5% and car sales decreasing 18.8% YoY. FADA indicated that the festive season failed to boost demand across the sector.

However, there was some positive news in the mutual fund space as Jio Financial Services received approval from the Securities and Exchange Board of India (SEBI) to set up a mutual fund in partnership with Blackrock Financial Management. This development is expected to enhance the company's investment portfolio.

Additionally, GAIL (India) signed a memorandum of understanding with Netherlands-based AM Green B.V. for the long-term supply of carbon dioxide for eMethanol production and renewable energy projects, highlighting the increasing focus on sustainable energy solutions.

Antony Waste Handling Cell surged sharply as its subsidiary, AG Enviro Infra Projects, secured an order worth Rs 908 crore from the Navi Mumbai Municipal Corporation (NMMC) to collect and transport municipal solid waste and related services over nine years.

The next few weeks will be critical for the Indian stock market as it continues to navigate through the intertwined challenges of rising oil prices, global geopolitical tensions, and domestic economic policies. Investors are advised to stay cautious, as the market remains on edge amid a fragile global macroeconomic environment.

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