World's biggest private equity, hedge funds and investment firm The Goldman Sachs Group today upgraded India to "market weight" from "underweight". The decision comes after observing India’s macro cycle, lower oil prices, lower valuation, and policy reform.
In a statement Goldman said, "The latest move by the RBI to raise the repo rate by 50 basis points was a clear sign in our view that the central bank is vigilant in bringing down inflation expectations. Despite the near-term weakness, policy tightening was a necessary step to reigning in inflation expectations and will ultimately serve as a net positive for the Indian equity market on a medium to longer term horizon.”
The RBI recently raised the tax rates and eventually it had increased the rates for 11 times within one year in expectation to nearing the end of its tightening cycle.
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