10950 NEXT SUPPORT; PORTFOLIO HEDGING ADVISED AS BUDGET NEARS

10950 NEXT SUPPORT; PORTFOLIO HEDGING ADVISED AS BUDGET NEARS

WORLD MARKETS

US indices tumbled 0.9%-1.4% with Dow and S & P 500 suffering worst single day fall since May and August respectively on persisting fears of higher interest rate.

Dollar index fell about 0.2% to 89.18.

U.S. crude fell 1.6% to $64.50 a barrel and Brent fell 0.6%.

European markets fell 0.9%-1.4%. Basic resources stocks led the losses amid a potential power crisis in China.

AT HOME

Benchmark indices fell seven tenth of a percent with Sensex settling 250 points lower at 36033 while Nifty finished 81 points lower at 11050. BSE mid-cap and small-cap indices fell 0.7% and 1.3% respectively. Except a 1.2% higher Oil & Gas index and flat Energy index, all the BSE sectoral indices ended in red with Consumer Durable and Basic Material indices leading the losses, down 1.7% and 1.2% respectively.

FIIs net sold stocks and index futures worth Rs 106 cr and 1441 cr respectively but net bought stock futuers worth Rs 687 cr. DIIs were net sellers to the tune of Rs 282 cr.

Rupee depreciated 2 paise to end at 63.61/$.

TVS Motor posted 16.3% y-o-y growth in December quarter net profit at Rs 154 cr. Revenue rose 23.5% to Rs 3685 cr and volume growth stood at 15%. Operating profit shot up 31% to Rs 287 cr and margin expanded by 50 bps to 7.8%.

IOC's standalone profit more than doubled to Rs 7883 cr from RS 3696 cr in previous quarter. Operating profit grew by 22.2% to Rs 13269 cr and margin expanded 390 bps to 12%. The company announced 1:1 bonus and dividend of Rs 19 per share.

OUTLOOK

Today morning, Asian markets are trading with cuts of upto 0.3% and SGX Nifty is suggesting about 30 points lower start for our market.

In yesterday's report we had asked trailing the stop-loss to 11040 in long positions. Nifty after touching a low of 11034, closed at 11050 and is set to open lower today. A breach of the low made in the first hour will confirm a sell on the hourly chart and would pave the way for further correction. 10950, where the trendline adjoining recent bottoms on the daily chart is placed, would be the next downside target if that happens.

Considering the heady run-up seen over last two months and the big event of Union Budget scheduled tomorrow, hedging of portfolios by way of selling higher strike Nifty calls would not be a bad idea.

ICICI Bank, L & T, VEDL and JSW Steel will report their quarterly earnings today.