Big SBI boost for Yes Bank, share price skyrockets over stake buy reports

Share market today opened on the higher side and so did the Yes Bank share price. It has skyrocketed by around 27 per cent today! Yes Bank shares opened at Rs 29.40 per stock levels and soon soared up to Rs 37.85 per stock levels, which is almost 27 per cent higher from its previous close. Currently, Yes Bank share price is trading around Rs 36.55 per stock levels ( at 2:59 PM). According to the stock market experts, this rise in Yes Bank stocks is due to the reports that the Government of India has directed the State Bank of India (SBI) to form a consortium to buy a stake in Yes Bank.

Speaking on alleged SBI connection with Yes Bank share price rise, Chandan Taparia, Derivative & Technical Analyst, Motilal Oswal said, "Yes Bank share price has appreciated by around 27 per cent today due to the reports on Government of India directing SBI to lead a consortium that will buy a stake in Yes Bank. The report says that SBI has been authorised to pick other consortium members and an announcement in this regard is expected soon." 

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Yes Bank share price rises, should you buy?
Taparia said that Yes Bank share price is oscillating in the range of Rs 25 to Rs 40. So, any kind of further rise in Yes Bank shares is possible only when the Yes Bank stock breaks its upper resistance of Rs 40 and sustains above this level. Hence, stock market investors are advised to wait either for some profit-booking or for the breakage of upper resistance of Rs 40.

Advising stock market investors to remain cautious while making any investment decision in the Yes Bank; Abhimanyu Sofat, Head Of Research at IIFL Securities said, "As per media reports, SBI has been told to invest as a lead in a consortium in Yes Bank. Though we may see a big spike in price of Yes Bank and negative reaction in price of SBI, we recommend caution to retail investors. The critical thing to watch would be percentage dilution of equity taking into consideration the conversion of existing bonds issued by Yes Bank into equity.”

On the suggestion to the stock market investors in regard to Yes Bank stocks, Rohit Singre, Senior Technical Research Analyst at LKP Securities said, "Yes Bank shares are facing huge hurdle at Rs 43 per stock levels and it has already appreciated around Rs 38. so, one should avoid taking any position in the stock as the overall trend of the Yes Bank share price is still weak."