Key stocks to watch: Jio Financial, Antony Waste, Gravita India, Lupin and Diffusion Engineers

The Indian equity markets faced a sharp decline last week, with benchmark indices dropping nearly 4.5% due to Middle East tensions and concerns about Foreign Institutional Investors (FII) moving funds to cheaper Asian markets like China. 

The BSE Sensex fell by 3,883 points to 81,688, and the Nifty 50 dropped 1,164 points to 25,015. Experts predict continued consolidation, advising a sell-on-rally approach. Key events to watch include the RBI monetary policy meeting, corporate earnings, geopolitical tensions, and US inflation data.

Top factors at playRBI Policy: All eyes are on the RBI’s upcoming monetary policy meeting on October 9, where no interest rate cut is expected. However, commentary on the timing of future rate cuts will be critical, affecting interest rate-sensitive sectors like banking, auto, and real estate.

Corporate Earnings: Several companies are set to release their September quarter earnings, including Tata Consultancy Services, Tata Elxsi, and Avenue Supermarts. The management's commentary on post-Fed rate cut recovery will be essential for the market outlook.

Middle East Tensions & Oil Prices: Rising tensions between Israel and Hezbollah have pushed oil prices up, which could impact India, a net oil importer. Any further rise in oil prices could lead to inflationary pressures, particularly for sectors like paint and tyres.

US Inflation & FOMC Minutes: Global investors will focus on US inflation data and FOMC minutes to gauge the Fed’s next policy move. The decline in US inflation to 2.5% in August provides hope for a soft landing of the world’s largest economy.

FII Flow: The outflow of FII funds from India, driven by cheaper valuations in Asian markets like China, has raised concerns. FIIs sold Rs 40,500 crore worth of shares last week, with DIIs offsetting much of this with Rs 33,074 crore in purchases.

Domestic Economic Data: Industrial production numbers for August and foreign exchange reserves will be released on October 11, providing further insight into the domestic economy.

Stocks to watch

• Jio Financial Services: SEBI has approved the company’s plan to set up a mutual fund with BlackRock.
• GAIL (India): Signed an MoU with AM Green for renewable energy projects.
• Lupin: US FDA issued five observations on its Pune biotech facility after an inspection.
• Antony Waste Handling Cell: Secured a Rs 908 crore contract from Navi Mumbai Municipal Corporation.
• One 97 Communications (Paytm): Deependra Singh Rathore appointed as CTO for Payments, replacing Manmeet Singh Dhody.
• Gravita India: Approved raising up to Rs 1,000 crore through equity.
• Bank of Maharashtra: Closed its Qualified Institutional Placement, raising Rs 3,500 crore.
• Adani Energy Solutions: Formed a new subsidiary for global transmission projects.

Bulk and block deals Diffusion Engineers: Alternate investment fund 3P India Equity Fund 1 acquired a 2.94% stake. HDFC Bank: BNP Paribas Financial Markets sold 43.75 lakh shares to Morgan Stanley Asia and Citigroup Global Markets Mauritius.