Moody’s set mood for India’s markets
Global credit ratings agency Moody’s on Tuesday set off a sharp rally in the country’s stock markets with a note that India’s credit rating was stable. The markets also cheered the debt-relief deal for Greece announced earlier. HT reports. A loan, a rating and a risebusiness Updated: Nov 27, 2012 22:33 IST
Global credit ratings agency Moody’s on Tuesday set off a sharp rally in the country’s stock markets with a note that India’s credit rating was stable. The markets also cheered the debt-relief deal for Greece announced earlier.
The 30-stock equities benchmark BSE Sensex gained 305.07 points to close at 18,842, raising hopes that it would cross the psychological 19,000-mark within this week.
The broader Nifty of the National Stock Exchange (NSE) too gained 1.6% or 91.55 points to close at 5,727.45 points.
“The sovereign rating is supported by credit strengths which include a large, diverse economy, strong GDP growth as well as savings, and investment rates that exceed emerging market averages,” Moody’s said in a report on Tuesday.
The agency maintained India’s rating at Baa3, which is just a notch above “junk” that carries a higher risk of default by the government.
The positive commentary came after months of unsparing criticism by global credit rating agencies which raised serious questions over India’s precarious public finances.
Last month, Standard and Poor’s had warned that India still faces a “one in three” chance of a downgrade despite the recent spate of moves that opened up insurance, pension and multi-brand retail sectors to foreign investment, the boldest reforms initiated by the Centre since assuming power in 2004.
Moody’s report too had its share of criticism, such as “India’s poor social and physical infrastructure, high government deficit and debt ratios, recurrent inflationary pressures and an uncertain operating environment.”
“Asian markets traded higher and the European indices also opened in the green even as Moody’s reiterated its positive outlook on India,” said Dipen Shah, head, PCG research, Kotak securities.
Kishor P Ostwal, CMD, CNI Research said, “The door for Nifty to touch 6,000 points is open after today’s gain,”
Industry experts say there were also expectations that the Indian government may be able to pass the FDI in multibrand retail segment.
Realty, consumer durables and fast moving consumer goods (FMCG) all three sectors set to benefit from opening of retail FDI gained the most.