Welcome to India which is the best rated since it was born!
Are you not feeling proud of your country getting an upgrade on its sovereign bond ratings, that means that investments in India are comparatively more safer today than yesterday! Yes, this is a memorable moment, very rare in history and first time in my 23 years of life! I was too young when the last rating came 11 years ago and now am in a much better position to savour the happiness of the highest ever rating that India ever had in its history today on 17th November. Number 8 has always been lucky for Modi. He took over as Prime minister on 26th May adding to 8, demonetization was announced on 8th November, another 8 and today, Moody’s rating upgrade also comes on 17th November adding to 8!
Why was India upgraded?
Reforms!! Two things made India better place to live in today! One is demonetization that brought cashless transactions and increase in digital transactions and the GST which expanded the tax base and we are now on the verge of 1 lakh crore tax collections per month, never before seen in the history of India. All this means that investing in India is safe so the risk of default reduces leading to the rise in the rating!
What does it means to India?
FIIs will queue up to invest in Indian bonds. Just 5% of bonds have foreign exposure so the bond rates will move down but mostly by domestic investors. The 10 yr will see a huge fall in the yields now. another is with the increased FDI investments that is possible because of the rating upgrade rupee will strengthen and that should be a huge boost to arrest the rising import bill. Both coupled together will mean inflation will further fall and all this means equity markets will celebrate. So, its all positive and from all directions. Its such a feel good factor.
What will happen to NIFTY today?
Sky’s the limit now. If you had taken a long position yesterday you would make unlimited profit. Your position would be around 10170 and today it will open above 10300 and you might end up seeing 10350 or even 10400!! Now it’s money money money all over and enjoy the day. Bank Nifty will be on fire and pumping all cylinders. Invest in long term, buy lot of stocks and believe in India growth story! You will never be in losses!