Bank stocks surge up to 6% as Moody's ups India rating

Bank stocks today rose by up to 6

per cent after the US-based Moody's upgraded India's sovereign

credit rating by a notch to 'Baa2' with a stable outlook.

Shares of PNB surged 6 per cent, Bank of Baroda soared

5.17 per cent, Yes Bank gained 4.16 per cent, SBI (3.91 per

cent) and ICICI Bank (3.55 per cent) on BSE.

The scrip of Axis Bank gained 2.64 per cent and HDFC Bank

went up by 1.18 per cent.

The BSE bank index also rose by 1.90 per cent to trade at

29,450.39.

The broader market also cheered the news as the BSE

Sensex jumped 331.72 points to trade at 33,438.54.

"Moody's upgrade comes as a welcome move in the wake of

slew of structural reforms in the economy which are expected

to enhance the potential growth in the medium term," said

Upasna Bhardwaj, Senior Economist, Kotak Mahindra Bank.

Moody s Investors Service today upgraded India's

sovereign credit rating by a notch to 'Baa2' with a stable

outlook citing improved growth prospects driven by economic

and institutional reforms.

"The decision to upgrade the ratings is underpinned by

Moody's expectation that continued progress on economic and

institutional reforms will, over time, enhance India's high

growth potential and its large and stable financing base for

government debt and will likely contribute to a gradual

decline in the general government debt burden over the medium

term," Moody s said in a statement.

Sovereign rating is a barometer of the country's

investment climate. It gives investors insight into the level

of risks associated with investing in a particular country and

also includes political risks.

For long, India was rated by other rating agencies at

Baa3, the lowest investment grade and just a notch above the

junk grade, which has now been upgraded a notch higher by

Moody's.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)