Yes Bank Share Price Prints Red Ahead of Earnings Release

Summary:
• The momentum around Yes Bank share price has been largely bearish in recent days, as concerns over takeover bid outweigh earnings news.

Yes Bank share price declined for the second consecutive session on Thursday, signaling likely jittery sentiments around the bank’s quarterly earnings release. The YESBANK share price was down by 1.4 percent as of this writing, trading at Rs 25.83. The bank has experienced a poor run in the last week , as uncertainty mounts about its much-publicised takeover. The share price declined by 3.9 percent last week, meaning that its gains of 0.8 percent this week still signals weak upside momentum.

Yes Bank will release its earnings report for the quarter ended June 2024 on Friday. However, its market performance a day to the release signals that the share price trajectory could head downwards in the coming week, mirroring its stock market performance in the days following the previous earnings release.

Last week, ratings agency, Moody’s raised the bank’s outlook from Positive to Stable, sending the share price up by 3.5 percent- its highest daily gain in the last week.  However, the absence of a substantive takeover bid by foreign investors has created a degree of FUD (Fear Uncertainty and Doubt) sentiment around the bank’s future, and raised questions as to how long it can sustain its “Stable” rating. Names like the UAE’s  First Abu Dhabi Bank PJSC and Japan’s Sumitomo Mitsui Financial and Mitsubishi UFJ Financial Group have come up, but nothing substantial has developed from their rumoured takeover bids. One of the barriers to potential bids from foreign institutions is that the current Indian FDI regulations restrict a single foreign company from having controlling stake in Indian Banks.

Technical analysis

The momentum on Yes Bank share price signals downward-leaning momentum, with the pivot mark at 26.00. That will likely see the establishment of the first support at 25.63, but extended control by the sellers could send the price lower to test 25.32. Alternatively, a move above 26.00 will signal control by the buyers, who will likely encounter the first resistance at 26.38. Extended control by the sellers could break the resistance, thereby invalidating the downside narrative and potentially sending Yes Bank share price higher to test 26.65.