Sensex Touches All-Time High on News of Major Investment Interest in Yes Bank

The stock that created a major buzz on Dalal Street was Yes Bank, which gained 24 per cent to close at Rs 70.45. The spike in the stock came on the back of information given by the bank to the exchanges that it had received a binding bid from an investor who wants to invest $1.2 billion in the bank.

While the name of the investor was not disclosed, the Street took this bid to be an indication that a large part of the trouble for the beleaguered bank would be over with this level of equity infusion. More than the investment in one specific case, this was an indication that big money is ready to come into the financial sectors.

If today it is Yes bank, the private sector banks and NBFCs, which are looking to raise fresh capital, would succeed in doing so if they are able to provide confidence to investors that they had cleaned up their house. That was, probably, the logic when investors made RBL stocks to gain 7.43 per cent on Thursday.

There was volatility in the markets as both Nifty and Sensex witnessed selling pressures in the last hour of trade. Part of the reason for this was the expiry of derivative contracts for the week and the month. But a statement from China that it had doubts on any long-term deal happening with the United States added to the pressures. Metal stocks, whose fortunes are tied up with consumption in China, saw declines. If a trade deal is signed between the two warring giants, the stocks would surely pick up.

The positive factor was that while indices showed a decline, the market breadth in the mid-cap segment did not suffer. Given the fact that Dow Jones futures are trading with a cut of more than 100 points, there is a chance that Friday trading may see indices coming under some profit booking.

However, if the market breadth remains positive, and no other major selling pressure emerges, there is every chance that after a minor consolidation, both indices and market breadth would stay under the control of the Bulls.

(Shilpa Nagpal is an analyst at Market Wizards Securities Pvt Ltd)