Moody's upgrade gives a Rs1,71,000-cr boost to BSE-listed stocks

The total market capitalisation of BSE-listed companies surged Rs1,71,489.22 crore to Rs1,44,90,494 crore as investors cheered an upgrade of India's sovereign credit rating by global rating agency Moody's Investor Services.

Both the Bombay Stock Exchange sensitive index Sensex and the National Stock Exchange's Nifty ended Friday with more than 0.5 per cent gains, powered by financial and metal stocks.

Market reaction to the rating action by Moody's was apparent from in the opening session that saw the BSE index shoot up 414 points at one point. But profit-taking pulled down shares as investors rushed to shave profit. The index closed the day at 33,342.80, up 235.98 points - or 0.71 per cent.

This took the overall total market capitalisation of BSE-listed companies up Rs1,71,489.22 crore at Rs1,44,90,494 crore.

Moody's Investors Service raised India's sovereign rating for the first time in 13 years on Friday, saying the Modi government's concerted efforts at economic and institutional reforms have improved India's growth prospects.

The US-based agency upped India's rating to Baa2 from Baa3 and changed its rating outlook to 'stable' from 'positive', saying the reforms will help stabilise rising levels of debt.

Cipla was the leader of the Sensex chart, gaining 2.64 per cent followed by HDFC Ltd  with 2.23 per cent gain.

Mid-cap and small cap indices also lend support with 1.03 per cent gain.

On BSE, 1,615 stocks advanced, while 1,135 declined and 174 remained unchanged.

Moody's Investors Services on Friday said the country was poised for fast growth because of wide-ranging economic and institutional reforms by Prime Minister Narendra Modi's government.

The Narendra Modi government welcomed the upgrade, saying that as rightly noted by the Moody's, this is in recognition of major economic and institutional reforms undertaken by Government of India.

The government said it is a recognition of path-breaking reforms, including introduction of the Goods and Services Tax (GST); putting in place a sound monetary policy framework; measures taken to address recapitalisation of public sector banks and a number of measures taken to bring formalisation and digitalisation (The JAM agenda) in the economy - demonetisation, the Aadhaar system of biometric accounts and targeted delivery of benefits through the Direct Benefit Transfer (DBT) system.

The government sees it as an endorsement of its ''commitment to macro stability which has led to low inflation, declining deficit and prudent external balance and fiscal consolidation programme which has resulted in a reduction of fiscal deficits from 4.5 per cent of GDP in 2013-14 to 3.5 per cent in 2016-17 and its consequential sobering impact on general government debt.''