An overview of Dalal Street reveals a sea of red as the domestic equity market faces a sharp correction in the last one month, driven by heavy sell-offs from foreign institutional investors (FIIs) amid escalating geopolitical tensions. Data shows that nearly 2,800 stocks have witnessed correction since September 24, 2024. The benchmark BSE Sensex retreated around 4,850 points or 5.7% to 80,065 during the same period. On the other hand, broader indices including the BSE Midcap and BSE Smallcap cracked 7% and 6.66%, respectively. With a fall of 64%, shares of Kamdhenu Ventures declined the most. The scrip declined to Rs 20.59 on October 24 from Rs 57.39 on September 24. It was followed by Hercules Hoists (down 62.50%), SRU Steels (down 58.4%), Vinny Overseas (down 54.2%), and LS Industries (down 53.9%). Satish Menon, Executive Director, Geojit Financial Services said, “The market is currently in a consolidation phase due to muted domestic earnings and the shift of FIIs funds into other emerging markets. In the near to medium term, the market is expected to remain range bound, with potential fluctuations capped around ±5%.” He further said that the current market dynamics are favourable for gold, driven by several factors including rising geopolitical tensions, lower interest rates, sluggish global economic growth, and strong demand from central banks. Data further highlighted that shares of companies such as Sharma East India Hospitals & Medical Research, Vasudhagama Enterprises, Rossell India, APT Packaging, Sylph Technologies, Valson Industries, Innovatus Entertainment Networks, Starlit Power Systems, Unifinz Capital India, and GACM Technologies also declined between 40%-50% during the same period. If you are looking to invest in this correction, Ravi Singh, Senior Vice President (SVP)—Retail Research at Religare Broking suggests zeroing in on sectors like banking and financials, infrastructure and IT. In the large cap space, barring IT majors HCL Technologies (up 3.87%) and Tech Mahindra (up 5.90%), other stocks in the BSE Sensex have also witnessed some correction in the last one month. Shares of Nestle India have declined the most 16%. HUL, Titan Company, IndusInd Bank and Reliance Industries also slipped 15%, 12%, 12% and 10%, respectively. For this year’s Diwali picks (Samvat 2081), JM Financial is positive on Reliance Industries (RIL) with a target price of Rs 3,500 for the time horizon of 6-12 months. The brokerage is also bullish on Power Grid Corporation of India (target price: Rs 383), Bajaj Finance (target price: Rs 8,552), ICICI Lombard General Insurance (target price: Rs 2,450), Jindal Steel & Power (target price: Rs 1,150), National Aluminium Company (target price: Rs 264), Gravita India (target price: Rs 3,068), Macrotech Developers (target price: Rs 1,480), Olectra Greentech (target price: Rs 2,200) and Ashoka Buildcon (target price: Rs 290).