Street signs: Nifty at crucial juncture, YES Bank shares gain, and more

Nifty at crucial juncture

The markets witnessed a sudden selloff on Friday, led by a sharp decline in banking stocks. The 50-share Nifty breached the 11,300 level, but failed to sustain above it as it ended the week at 11,178. Technical analysts say the positive momentum in the market could sustain as long as the index stays above 11,100 levels. “The upside resistance is placed at 11,380, However, a downside break of 10,900 will suggest a reversal of uptrend and high possibility of a sharp correction thereafter,” said Nirali Shah, senior research analyst, Samco Securities. Market experts say rising bond yields in India, as well as the US, will act as headwinds for the market.

Sundar Sethuraman

YES underwriter in the money

Shares of YES Bank unexpectedly rallied as much as 36 per cent last week, even as the Nifty Bank index was down marginally. Even as the stock was locked in the lower circuit on Friday, last week's gain brought cheer to those who subscribed in the Rs 15,000-crore follow-on public offering (FPO). More so to SBI Capital Markets (SBI Caps), which being the underwriter had to buy the unsubscribed portion of the FPO. Sources said SBI Caps' underwriting obligations were higher than usual as several retail applications made using unified payments interface (UPI) got rejected. “Retail applications worth almost Rs 200 crore made via UPI got rejected due to procedural errors. This increased the underwriting burden on SBI Caps. However, the investment bank may not be complaining now that shares are 25 per cent above the FPO price,” said a source. An e-mail sent to SBI Caps on this issue remained unanswered.

Samie Modak

Focused funds see positive flows

Focused funds, which take concentrated bets and limit diversification, were the only equity category to see positive flows in July. Overall, equity funds saw over Rs 2,400 crore of net outflows in July — the first time four years that equity schemes saw negative flows. Advisors say focused funds are gaining investor traction, as such funds could generate wider outperformance in the market recovery. "A well-built focused equity portfolio can help investors to cover the losses endured in a market correction. In such strategies, the fund manager's conviction tends to be higher in stock selection," said an advisor. A focused fund cannot have more than 30 stocks at any given point of time. There are no such caps that other equity funds need to stick to.

Jash Kriplani