X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
Investing in India? Get Equitymaster Research  
Is a rating upgrade on the cards? 
(Thu, 18 Apr Pre-Open) 
 
It was not so long ago when several global rating agencies had given negative outlook on India. Some had even threatened a downgrade to junk rating! A combination of factors viz; widening fiscal deficits, slowing growth and persistently high inflation plagued the country's sovereign rating outlook.

However the recent correction in global commodity prices, seems to be ray of hope in this tough time.

India's current account deficit had widened to 6.7% of GDP for the quarter ended December 2012. This was largely attributable to the rise in import bill for of oil and gold. These outpaced exports of goods and services by a huge margin. The exports were also impacted as the rupee dollar rates made Indian goods more expensive and less competitive in the global markets, thus resulting in bloated deficit.

With the recent fall in commodity prices, the import bill for gold and crude oil is expected to shrink, thus narrowing the current account deficit (CAD) gap. Plus fall in inflation may also prompt the Reserve Bank of India (RBI) to cut interest rates. This will not only increase demand in Indian markets but also stimulate investments and GDP growth.

These signs of revival, if sustained, should offer some comfort to global rating agencies. We would therefore wait and watch if the downtrend in commodity prices brings in a possibility of rating upgrade for India.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

View all commentaries | Archives  RSS
Read the latest Market Commentary
 
BSE-30
 

 
Go
 

Equitymaster requests your view! Post a comment on "Is a rating upgrade on the cards?". Click here!

  
 

Become A Smarter Investor In
Just 5 Minutes

Multibagger Stocks Guide 2017
Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

MARKET STATS