India’s phased loosening of restrictions will see malls, restaurants and places of worship reopening as of June 8 after the world’s toughest stay-at-home curbs to stem the Covid-19 pandemic muted economic growth.
“The gradual easing of the lockdown has boosted sentiment,” Ajit Mishra, vice president of research at Religare Broking Ltd., wrote in a note Monday. “The recent surge indicates markets are focusing more on the optimistic side and anticipating a favorable scenario.”
Still, Moody’s Investors Service on Monday reduced the country’s sovereign rating by a notch to the lowest investment grade, which may undermine India’s efforts to attract foreign capital into its debt market to fund a ballooning fiscal gap and avoid the first economic contraction in more than four decades.
With the RBI easing and stimulative measures from the government, the biggest uncertainty has been about the impact the coronavirus would have on the Indian economy. The lockdown is now easing and the country’s youthful demographics has helped it weather the storm better than many. That is helping investors look beyond the downgrade of sovereign debt.Click HERE to subscribe to Fuller Treacy Money Back to top