S&P downgrades US credit rating from AAA - What for Indian equities?

[NewsDesk]

Credit rating agency Standard & Poor's on Friday downgraded the United States' credit rating first time in the history of the ratings.
The credit rating agency said that it is cutting the country's top AAA rating by one notch to AA-plus. The credit agency said that it is making the move because the deficit reduction plan passed by Congress on Tuesday did not go far enough to stabilize the country's debt situation.
A source familiar with the discussions said that the Obama administration feels the S&P's analysis contained "deep and fundamental flaws."
S&P said that in addition to the downgrade, it is issuing a negative outlook, meaning that there was a chance it will lower the rating further within the next two years. It said such a downgrade to AA would occur if the agency sees less reductions in spending than Congress and the administration have agreed to make, higher interest rates or new fiscal pressures during this period.
S&P first put the government on notice in April that a downgrade was possible unless Congress and the administration came up with a credible long-term deficit reduction plan and avoided a default on the country's debt.
After months of wrangling and negotiations with the administration, Congress passed this week a debt reduction package at the 11th-hour that averted a possible default.
In its statement, S&P said that it had changed its view "of the difficulties of bridging the gulf between the political parties" over a credible deficit reduction plan.
S&P said it was now "pessimistic about the capacity of Congress and the administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government's debt dynamics anytime soon."

S&P's decision to strip the U.S. of its sterling AAA credit rating for the first time and move it down one notch, to AA+, deals a blow to the confidence of consumers and businesses at a dangerous time, economists say.

Source - Yahoo Finance

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[koolz]

It's just a panic selling of Indian equities. I would suggest buy some good stock at this moment and wait for few months, you would get decent return.

[koolz]

I would pick JWS, Yes Bank, ICICI Bank and Reliance in the current down fall. Happy trading!!

[NewsDesk]

Goldman Sachs on Monday upgraded India to "market weight" from "underweight," given a likely turn in the macro cycle, lower oil prices, lower valuation, and policy reform.

"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," Goldman said in a note.

Source - economictimes.com

[waves80]

Is it right time for small investors like me to enter into the market?

[Rahul]

Is it right time for small investors like me to enter into the market?

If you see the comment above your comment, Goldman Sachs upgraded India rating, so no need to worry and for small investor, I would suggest to invest in MFs not directly in shares that too via SIP mode.