Tit - bits

In the US,  the S&P 500 ended yesterday, 4.9% lower at 2,741.38 and just short of a bear market. The Nasdaq Composite fell 4.7% to 7,952.05 and was also about 19% below its all-time high -- a 20% decline is considered a bear market on Wall Street.

Losses intensified on Wednesday's trading after the World Health Organization declared the  coronavirus outbreak an official global pandemic. The number of coronavirus cases around the world totaled more than 100,000, according to data from Johns Hopkins University. In the U.S. alone, more than 1,000 cases have been confirmed. 

This increase in cases though adds fears of further escalation of the disease and calls for government intervention but I feel will have little effect on global growth. 

Back home, the S&P BSE Sensex, rose 62.45 points or 0.18% to close at 35,697.40. The index rose 386.56 points, or 1.08% to hit the day's high of 36,021.51 in afternoon trade. The Nifty 50 index shed 2.55 points or 0.02% at 10,448.90. It jumped 93.65 points, or 0.90% to hit the day's high of 10,545.

In the broader market, the BSE Mid-Cap index fell 0.89% and the BSE Small-Cap index fell 0.36%. The market breadth was negative. On the BSE, 1048 shares rose while 1430 shares fell. A total of 165 shares remained unchanged.

#The Nifty would continue to get support around 10200/10400 levels where you can do the range play. You can apply the same strategy of yesterday,  for Nifty futures of today,  viz buying at the opening trade and then selling at 30/40 points above your buy price. 

#Yesterday, the shares of Yes Bank Ltd surprisingly closed at Rs.28.80, up 35.53% with intraday high as Rs.29.60, on the news that SBI will be forced to take 49% stake in the bank. But there are few issues here which needs a closer look:

• The 'moratorium-related FAQs' posted on its website, the crisis-hit Yes Bank has said services such as online remittances, clearing of cheques and demand drafts as well as outward payment of EMIs will continue to remain under restriction during the moratorium period.
• It is only inward real-time gross settlement (RTGS) services have been enabled to allow customers to make payments towards their credit card dues and loan obligations from other bank accounts. This doesn't make sense, for those having their money in the bank. 
• It is a Rs.2, Face Value share and at the CMP of Rs. 28.80, it is virtually trading above Rs.100, considering Rs.10 as the face value. 
• The Book Value of Rs.105.67 shown in Moneycontrol.com may NOT represent its current net worth. Suresh Ganapathy, an analyst at Macquarie Capital Securities, wrote that the bank's net worth may indeed be zero, assuming a large portion of its below investment grade assets were wiped off. “Yes Bank has a net worth of Rs 25,000 crore.
• Macquare and JP Morgan has said the current value of its shares should be Re.1. Or in other words,  SBI or other banks should buy its shares at a price of Rs.1, which is 28.80 times lower than the current CMP of Rs.28.80.
• The total exposure of Yes Bank could be over Ra.2.25 lakh crore but of that, the non-performing assets (NPA) are reportedly around Rs.42,000 crore.
• To buy such a high stake the SBI will have to go for an open offer, whose price is still unknown. Moreover, much depends on how the minority shareholders take this FORCED acquisition by SBI, bleeding its balance sheet. It is another question which needs to be answered immediately.

I therefore feel that in the short term the Rs. 2 face value shares of Yes Bank Ltd will peak out out at Rs.29/30 levels and a downward price spiral could start at any time from now, unless we get more clarity on the issue. In such circumstances I would suggest you to either get out of the scrip or book profits if you have entered when it fell to below Rs.10. Too much risk taking is not good.

#The fall in crude oil prices from $52/barrel to below $40/barrel is positive for the Indian economy which imports around 82% of its oil needs but is aiming to bring that down to 67% by 2022 by replacing it with local exploration, renewable energy and indigenous ethanol fuel. India was the third top net crude oil (including crude oil products) importer of 205.3 Mt in 2018. So,  any fall in crude oil price could give an upward flight to Indian Stock market. The crude has been falling since some time due to trade wars among Russia, US Shale Gas and Saudi Arabia.