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Markets will remain closed on 25th May, 2020 on account of Id-Ul-Fitr (Ramzan Id).

Have rating agencies slipped again?
Tue, 14 Jun Pre-Open

Rating agencies have been accused of bailing out the 'Too Big To Fail' long before they were on the verge of bankruptcy. The agencies have known to be generous with select institutions. Especially ones that were large enough to keep the rating commissions ticking even in times of financial stress. Only when the companies failed to encash their notional assets and declared bankruptcy did their ratings slip. Such vested interests and opaque operations of rating agencies have been criticized even by the likes of Warren Buffett. In fact, Buffett pared his stake in Moody's soon after the crisis of 2008 and even admitted his mistake of investing in the firm.

But rating agencies have not yet learnt the lessons when it comes to sovereign ratings. Ratings for economies endowed with lower sovereign rating than the developed ones are more elastic. For instance India's ratings get downgraded at every hint of slippage in fiscal deficit levels. However, as the US policymakers themselves admit the chances of debt default, a rating downgrade is still doubtful. Legendry commodity investor Jim Rogers says that the ratings downgrade for the US is long overdue. In an interview to ET, Rogers claims his failure to understand what took Fitch so long to consider the downgrade. The fact that Rogers himself has been bearish on the US dollar for long confirms his view.

We believe that the callousness on the part of the US-bred ratings agencies is nothing but an attempt to keep a wide gap in borrowing rates. As long as the sovereign rating of the US remains far superior to that of the developing economies, the Fed can continue to lend cheap. The low risk associated with the US dollar brings the risk free rate for the economy near zero. At the same time, entities in economies that are fundamentally far more stable continue to pay a dearer price for their borrowings. Not that this attempt has helped the US pull its economy out from another recession. But it has certainly kept the hope for recovery alive.

But the days of AAA rating for the US are certainly numbered. As was the case with the Wall Street bankers who fooled the ratings agencies into deferring their opinions. Hence companies and investors looking for some honest opinions from the rating agencies need to do a reality check first.

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Stock Market Updates

ESCORTS LIMITED at 52 Week High; BSE 500 Index Down 0.5 % (Today's Market)

May 22, 2020 03:27 PM

ESCORTS LIMITED share price has hit a 52-week high. It is presently trading at Rs 918. BSE 500 Index is down by 0.5% at 11,905. Within the BSE 500, ESCORTS LIMITED (up 3.9%) and TVS SRICHAKRA (up 20.0%) are among the top gainers, while top losers are MAHINDRA HOLIDAYS and TCI EXPRESS LTD.

INDIABULLS HOU. FIN. Plunges by 5%; BSE 500 Index Down 0.8% (Today's Market)

May 22, 2020 03:21 PM

INDIABULLS HOU. FIN. share price has plunged by 5% and its current market price is Rs 124. The BSE 500 is down by 0.8%. The top gainers in the BSE 500 Index are TVS SRICHAKRA (up 20.0%) and ZEE ENTERTAINMENT (up 6.0%). The top losers are INDIABULLS HOU. FIN. (down 5.1%) and HDFC (down 5.1%).

TVS SRICHAKRA Surges by 11%; BSE 500 Index Down 0.6% (Today's Market)

May 22, 2020 02:33 PM

TVS SRICHAKRA share price has surged by 11% and its current market price is Rs 1,214. The BSE 500 is down by 0.6%. The top gainers in the BSE 500 Index is TVS SRICHAKRA (up 10.5%). The top losers are RAJESH EXPORTS and SKF INDIA .

FEDERAL BANK Plunges by 5%; BSE BANKEX Index Down 2.5% (Today's Market)

May 22, 2020 02:31 PM

FEDERAL BANK share price has plunged by 5% and its current market price is Rs 40. The BSE BANKEX is down by 2.5%. The top gainers in the BSE BANKEX Index is KOTAK MAHINDRA BANK (up 0.4%). The top losers is FEDERAL BANK (down 5.2%).

CANFIN HOMES Plunges by 5%; BSE 500 Index Down 0.8% (Today's Market)

May 22, 2020 02:15 PM

CANFIN HOMES share price has plunged by 5% and its current market price is Rs 287. The BSE 500 is down by 0.8%. The top gainers in the BSE 500 Index are TVS SRICHAKRA (up 6.7%) and NIIT TECHNOLOGIES (up 6.4%). The top losers are CANFIN HOMES (down 5.0%) and BAJAJ FINSERV (down 5.5%).

Sensex Trades 300 Points Lower; Axis Bank & Bajaj Finance Top Losers (Today's Market)

May 22, 2020 12:30 pm

The BSE Sensex is trading down by 301 points, while the NSE Nifty is trading down by 85 points.

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