Moody’s India upgrade among top 4 factors fueling D-Street rally; Sensex up 400 points
It is a big day for investors in terms of the money they can make and the government which put in plenty of efforts to make this possible. It will be positive for equity markets, bonds as well as currency.
Bulls regained their hold on D-Street on Friday after Moody’s rating in a surprise move upgraded India's local and foreign currency issuer ratings to Baa2 from Baa3 and changed the outlook on the rating to stable from positive after a long gap of 13 years.
The last time the Moody’s global rating agency revised the rating was when the BJP government led by Atal Bihari Vajpayee was in power, said a report.
Reacting to the news, the S&P BSE Sensex rallied over 400 points while the Nifty50 is back above 10,300. The rally was led by banks, metals, realty, energy, consumer durables, and oil & gas stocks.
Top S&P BSE Sensex includes names like ICICI Bank which rose 2.7 percent, followed by Tata Steel which rallied 2.6 percent, and SBI rose 2.3 percent in morning trade.
Here is a list of top four factors which are fuelling a rally on D-Street:
Moody’s upgrades India
It is a big day for investors in terms of the money they can make and the government which put in plenty of efforts to make this possible. It will be positive for equity markets, bonds as well as currency.
The continued progress on economic and institutional reforms will, over time, enhance India's high growth potential, says rating agency Moody's Investors Service, which just upgraded India's local and foreign currency issuer ratings to Baa2 from Baa3.
Moody’s changed the outlook on India’s rating to stable from positive adding that the reform program will complement the existing shock-absorbance capacity provided by the country’s strong growth potential and improving global competitiveness.
"The upgrade comes as a pleasant positive surprise. This should lead to some respite for the bond markets and should also strengthen the rupee in the short term," Jimeet Modi, Founder & CEO, Samco Securities told Moneycontrol.
"Over the long term, it’s a great advantage since it leads to an overall reduction in the cost of funds and interest savings for the government," he said.
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