REUTERS - Fitch Ratings revised India's sovereign rating outlook to "stable" from "negative" on the back of measures taken by the government to contain the budget deficit, it said on Wednesday.
It expects the government to broadly meet its 2013/14 fiscal deficit target of 4.8 percent of the gross domestic product, it added.
Fitch had cut India's outlook to negative in June 2012, following Standard & Poor's which just last month retained its negative outlook on the economy.
COMMENTARY
SHAKTI SATAPATHY, FIXED INCOME ANALYST, AK CAPITAL, MUMBAI
"Today's outlook upgrade would give some medium term respite (6 months - 12 Months) and is largely a factor of government's reform measures for putting the fiscal house in order. However, the consistency in introducing more reforms would count in the coming days, which looks a tad difficult given the election year ahead.
"Having said that, the stable outlook would give some near term stability in the domestic currency and bond market."
ANJALI VERMA, ECONOMIST, PHILLIPCAPITAL, MUMBAI
"The battered rupee will see some positive effect as a result of the outlook upgrade. It could attract some more flows from foreign investors.
"However, I do not think this changes anything at this juncture for the economy. Consumer inflation is still up, industrial production is low. RBI (Reserve Bank of India) is likely to hold rates steady on June 17."
SONAL VARMA, ECONOMIST, NOMURA, MUMBAI
"The outlook upgrade acknowledges that recent government measures are in the right direction and that the economy will slowly start to improve".
