Standard and Poor’s raised the outlook for India’s “BBB-minus” rating to “stable” saying the country’s government mandate and improved political setting offered a conducive environment for reforms.

Reuters quoted Radhika Rao, Economist at DBS Singapore: “The S&P rating outlook revision is an affirmation of the economy’s growth prospects, macro stability and lower vulnerability of external balances. The government, backed by a decisive mandate, and a credible inflation-fighting central bank have provided a positive backstop for the economy and is likely to boost investor confidence in the months ahead. Improved foreign reserves stock and a comfortable balance of payments position act as additional buffers against external volatility.”

S&P had cut India’s outlook to “negative” in April 2012. India is now rated at the “stable” investment outlook level by all three major global credit agencies. India’s stock market reacted favorably to the news almost immediately.