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YES Bank dips even after market rises by 150 points, NIFTY analysis with experts, Q2 review of hospitality sector, Indian markets advance and move above 10,850…. Market updates for 29/11/18

PurpleTrades - stock market courses > News > YES Bank dips even after market rises by 150 points, NIFTY analysis with experts, Q2 review of hospitality sector, Indian markets advance and move above 10,850…. Market updates for 29/11/18

Report by- Sabyasachi Bhattacharya

 

YES Bank dips even after market moves upward. Read below to know why-

Yes Bank has been continuously falling for the past week due to all the bad news that has been circulating them for a while. Yes Bank’s shares hit fresh 33-month low, shedding another 9 percent on Thursday as rating agency ICRA also downgraded lender’s long-term ratings, following the action by its parent firm Moody’s. The stock fell nearly 26 percent in five consecutive sessions to Rs 147, the lowest level since March 2, 2016 while it shed 63 percent from its record high hit in October, 2018. A day after Moody’s downgraded it citing poor corporate governance, its domestic arm ICRA on Wednesday followed suit with a similar action, downgrading Yes Bank’s long-term ratings. The agency had placed the bank on rating watch earlier this month and had said the resignations–there were three so far–would impede the bank’s ability to raise capital. The agency said it would continue to monitor the progress made by bank on the appointment of new MD & CEO, the outcomes of the risk supervision audit by the RBI, capital raising to improve the capital cushion and any further developments which may impact the credit profile. The bank has been facing troubles since mid-September, when the RBI curtailed the term of its chief executive Rana Kapoor, who is also among the promoters. Hence, since then, analysts concerned about bank’s corporate governance. On Tuesday, Moody’s Investors Service downgraded the bank’s ratings to non-investment grade and changed outlook to negative from stable. Meanwhile, two promoter shareholders of Yes Bank — Morgan Credits (MCPL) and Yes Capital (YCPL) — Wednesday said they had raised some funds to meet their growth objectives and have no commercial dealings with the private sector lender. The statement comes in the wake of a media report which said Yes Bank chief Rana Kapoor’s investment firms borrowed money from mutual funds and invested it as equity in a finance company.

Source- MoneyControl, Purple Trades Research Department   

 

 

 

 

Hospitality sector’s Q2 result review; Companies trying to improve margin-

A favourable domestic demand-supply situation aided performance of hotel companies in a seasonally weak Q2 FY19. The quarter gone by saw better occupancies. With limited rooms entering the system and sustained uptick in demand, room rates improved, enabling an uptick in revenue per available room (RevPARs) across companies. We expect the momentum to continue and strong growth to follow, leading to a healthier growth in Q3, given H2 is seasonally the stronger half for the leisure industry. Let us review some hotels of this sector-

  • Lemon Tree Hotels- The company posted a steady performance, led by a 9 percent year-on-year (YoY) improvement in room rates and 230 basis points (100 bps = 1 percentage points) uptick in occupancies along with a 3 percent uptick in the number of rooms. Controlled power and fuel costs and rental expenses helped improve operating margin, which saw a250 bps uptick. Higher other income contributed to the improved net profit.
  • Royal Orchid Hotels-The company reported a healthy 9 percent uptick in revenue, with an improvement in both occupancies and average room rate (ARRs). With a noticeable uptick in margin (160 bps), it managed to record a 20 percent growth in earnings before interest, tax, depreciation and amortisation (EBITDA). Lower other income and higher other expenses led to a 3 percent contraction in net profit. Losses at the subsidiary level have started to trim. With reduced debt, it reported reduced interest cost. It plans to add around 15 more properties in FY19, which would lead to an additional 600 rooms in the portfolio and would provide a boost to topline in coming quarters.
  • East India Hotels-After opening of the prime Oberoi Hotels & Resorts’ property in Delhi in January, EIH (formerly East India Hotels) has seen a steady growth in revenue and profitability. With traction in operations, the quarter gone by saw a strong 22 percent growth in topline. Boost in occupancies and room rates across properties, coupled with cost optimisation, enabled 670 bps uptick in margin. Proceeds from the sale of investments in associate companies led to the abnormal boost in net profit.

 

 

Let us take a look at their performances-

Source- MoneyControl, Purple Trades Research Department   

 

 

 

 

 

Indian Indices move ahead as Nifty closes above 10,700-

Chart source- ChartInk

Indian markets had a bullish day today as both the Indices SENSEX and NIFTY moved forward. Nifty had a major GAP-UP opening after which it started to climb upwards slowly before reaching today’s high at 10,880 during the later stages of the day and then slowly consolidating throughout the lunch session of the market. Our experts at PURPLE TRADES  predicted the fact that if Nifty crosses above the 10,750 mark then we can expect an up move which is what happened today. You can read yesterday’s report to find out more. At the end of the day we can call it a positive close for the market, making it fourth consecutive session of gains. A stronger rupee, falling crude oil prices along with a dovish commentary from the US central bank chief boosted markets across the globe, including India. Back home, the Nifty surged past 10,800 on a day when F&O contracts for November series expire. The Sensex, meanwhile, hit 36,000 during the day’s trade, rising over 530 points intraday. Both indices ended the session on a strong note, with the Nifty retaining 10,800 mark on expiry. At the close of market hours, the Sensex closed up 453.46 points or 1.27% at 36170.41, and the Nifty up 129.80 points or 1.21% at 10858.70. The market breadth was narrow as 1300 shares advanced, against a decline of 1292 shares, while 145 shares were unchanged. Bajaj Auto, Kotak Mahindra Bank, and Bajaj Finance were the top gainers, while Power Grid, NTPC, and HCL Tech lost the most.

 

Let’s take a look at the key reasons for the up move in the Indian markets-

  • US benchmark indices rallied 2-3 percent on November 28, lifted by remarks from Federal Reserve Chairman Jerome Powell. Powell asserted that policy rate is below the neutral rate or the rate at which it neither stimulates nor restrains economic growth by changing its interest rate policy. This is in contrast to Fed’s September meet statement and follow-up speeches, and therefore opens up possibilities of Fed going slow on rate hikes, particularly in 2019.
  • The rupee jumped 80 paise to breach the 70 per dollar mark and touched 69.81, a three-month high level intraday amid sustained selling of the greenback by exporters and easing crude oil prices.
  • Oil prices fell sharply after US crude inventories hit their highest in a year, ahead of G20 meeting later this week. Brent crude futures, the international benchmark for oil prices, fell 1.16 percent to $58.08 a barrel
  • Foreign institutional investors have been net buyers in November after consistent selling in previous three consecutive months, which also boosted market sentiment.
  • The Nifty50 closing above 10,850 indicate the sentiment has been turning positive and is probably heading towards psychological 11,000 levels.

 

Let’s take a look at the performance of major Indices-

European stocks were higher as investors looked to read into talks between US and China to address trade war concerns. Asia markets were higher as Nikkei went up by 0.38%. NASDAQ was seen trading in the red.

Source- MoneyControl, Purple Trades Research Department   

 

 

 

Key Points for Traders to watch out for while trading Nifty tomorrow-

  • 10,880 is a short term support for Nifty.
  • If Nifty breaks 10,880 then it has the potential to go down.
  • 10,845 is a short term resistance for Nifty.
  • If Nifty breaks 10,845 then it has the potential to go up.

 

 

Top sectors that moved the market today-                            Data source- Moneycontrol

 

 

Top Gainers for today-                                                                                        Data source- Moneycontrol

 

 

Top losers for today-                                                               Data source- Moneycontrol

 

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