Implications: Positive for both Equity and Debt markets as majority of the FII allocation goes by ratings and economic outlook of a country. A rating upgrade after 13 years will kick-off foreign buying in Indian equities and debt.
A Quick Summary:
- Upgrades India`s government bond rating to Baa2 from Baa3
- Changes India`s rating outlook to stable from positive
- Ups India rating on view of steady progress in econ reforms
- India`s econ, institutional reforms to up growth potential
- High debt burden remains constraint for India rating profile
- GST to remove interstate trade hurdles, up productivity
- India is mid-way through economic, institutional reforms
- India reforms will foster sustainable growth
- See India FY18 real GDP growth to moderate to 6.7%
- See India FY19 real GDP growth rise to 7.5%
- See India`s growth at robust levels FY20 onwards
- India`s growth potential significantly higher than peers
- Expect India government debt level to remain stable
- Expect India debt-to-GDP ratio to rise by about 1% in FY18
- Reforms to strengthen India`s institutional framework
- Govt support for PSU banks lowers India banking sector risk
- Govt support for PSU banks to support India`s growth