On Friday, S&P upgraded India's outlook to stable from negative but maintained its rating at BBB-/A-3. The improvement would be reassuring to investors concerned about the economic recovery and would boost confidence in the government's policy measures, said analysts. "The change in outlook indicates amplified conviction in the government's intent and ability to make changes for growth. Investor confidence will move up a notch along with the outlook and this essentially means money waiting on the sidelines will now come into India," said Jayant Manglik, president-retail distribution, Religare Securities.Analysts. Analysts said investors were seen covering their short positions by buying into stocks of the power and banking sectors, which had fallen sharply in the wake of the Supreme Court judgment.
The BSE Bankex was up 1.9 per cent, led by Canara Bank and YES Bank, each up over 5 per cent. The BSE Power Index, which had fallen over 3.4 per cent since the SC verdict, was up 1.2 per cent, led by gains in JP Power which inked a deal with JSW Energy on Thursday for the sale of three projects after its deal with Reliance Power collapsed the day before. JP Power was up 8.9 per cent, followed by Adani Power, up 5.6 per cent, and GMR Infra, which rose 3.5 per cent. Despite the positive close on Friday, experts remain cautious about the future direction of the stock market as near-term concerns still persist. "The upgrade uplifted the market mood on Friday but there is still uncertainty on the currency front. Besides, investors will be watching the Reserve Bank of India policy review on Tuesday," said Sunil Jain,VP (equity research), Nirmal Bang Securities.