Weekly Wrap: Yes Bank’s Surprise Loss Spooks Sensex, Nifty

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S. (Photographer: Scott Eells/Bloomberg)

Indian equity benchmarks registered weekly losses as shares of Yes Bank Ltd. tumbled 26 percent after the Mumbai-based lender posted an unexpected loss in the fourth quarter.

The S&P BSE Sensex and the NSE Nifty 50 Index ended lower at 38,963 and 11,712, respectively.

The markets during the week showed extremely divergent behavior, said Deepak Jasan, head of retail research at HDFC Securities.

“Given the precipitous fall in April's auto numbers, such as passenger vehicles, two-wheelers and tractors, the stock prices of these automakers should have tanked. However, these companies have stood their ground and haven't fallen drastically,” Jasan said in a statement. “It was solely because of the impact of global liquidity.”

Jasan expects the markets to remain choppy in the next few weeks amid the ongoing election and quarterly numbers of corporate houses.

The Nifty is hovering near its all-time high, neither breaking highs nor breaking lows, Jasan said. “Though small-cap indices have cracked but Nifty 50 is still resilient, indicating that eventually the highs will be breached and Nifty 50 will move into a new price territory,” he said. “But in the intermediate period, till such time breakout is not registered, it is better to avoid trading.”

Decisive break above 11,900 should be used as an opportunity to go long or break below 11,550 should be taken as an opportunity to go short.

How Broader Market Performed

The broader market represented by the NSE Nifty 500 Index closed 0.67 percent lower during the week.

Nine out of the 11 sectoral gauges compiled by the National Stock Exchange declined, led by a 2.55 percent fall in the NSE Nifty Pharma Index. On the other hand, the NSE Nifty Metal Index was the top gainer, up 1.14 percent.

How The Rupee Performed

The Indian rupee was the best Asian currency this week. The domestic unit appreciated 1.15 percent against the U.S. dollar—the most since March 15, 2019—to end at 69.22.