07:50
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MUMBAI Goldman Sachs upgraded India Monday to "market weight" from "underweight", given a probable turn in loop macro, reduction of oil prices, lower assessment and policy reform.
"The latest move by RBI to raise the repo rate by 50 basis points was a clear sign we believe that the Central Bank is monitoring to reduce inflation expectations," Goldman said in a statement.
Despite the short-term weakness, tightening of policy was a necessary step to reign in inflation expectations and will serve at the end as a net positive for the stock market to support Indian on a longer term horizon, he added.
The Reserve Bank of India (RBI), which raised rates 11 times since mid-March 2010, should be nearing the end of its cycle of tightening.
(Reporting by Divya Chowdhury and Neha Singh; Editing by Ranjit Gangadharan)
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