Moody’s Investors Service raised the outlook on India’s Baa3 credit rating to “positive” from “stable” on Thursday – becoming the first of the three major ratings agency to upgrade its view.
The revision was based on the perception that India’s policymakers are establishing a framework that will improve India’s “macro-economic, infrastructure and institutional profile”, allowing the economy to outperform its peers over the medium-term.
“There is an increasing probability that actions by policy makers will enhance the country’s economic strength and, in turn, the sovereign’s financial strength over coming years,” Moody’s said.
Peers Standard and Poor’s and Fitch Ratings rate Indian credit at the lowest investment grade, in line with Moody’s rating, but with a “stable” outlook.
Investors reacted positively to the move, with the benchmark S&P BSE Sensex rising 0.5 percent at the start of trade.