Saluting the rating upgrade, BSE Sensex today surged 235.98 points, or +0.71 per cent, to settle at 33,342.80 with drug major Cipla being the top gainer and Infosys, the worst laggard. The Nifty50 index gained 68.85 points, or +0.67 per cent, to end the session at 10,283.60 today, with 28 out of 50 constituents ending in the green.
Benchmark indices ended higher today after global rating agency Moody's Investors Service upgraded India's sovereign rating to Baa2 from Baa3 and changed the outlook to stable from positive, citing improved growth prospects driven by economic and institutional reforms. This development that will give a big boost to Modi government, reduce the cost overseas borrowing and improve investments in India. This year it expects real GDP growth to moderate to 6.7% in the fiscal year ending in March 2018.
The Nifty50 saw traders cheer Moody's surprise rating upgrade for India today, and it was all evident in the 110-point gap-up opening. But the index faced resistance around the 10,340 level and eventually ended with a gain of just half-a-per cent. The index could not close above its opening level. In the process, it formed a small bearish candle on the daily chart. But at no point did the index fall into the negative terrain. It has already negated the formation of lower highs and lower lows and now needs to hold above 10,230 to get the stability for the next upmove towards 10,350 and 10,400 levels. On the downside, supports are seen at 10,178 and 10,120 levels.