In 2015, the rating outlook was changed to 'positive' from 'stable'.
Key indices on Monday saw a sharp jump as Sensex rallied over 400 points after global ratings agency Moody's on Thursday raised India's sovereign credit rating to 'Baa2' from 'Baa3'.
The ratings upgrade by the Moody's comes after a gap of 14 years.
The 30-share BSE Sensex was up 396.36 points or 1.20 percent at 33,503.18 and the 50-share NSE Nifty gained 117.10 points or 1.15 percent at 10,331.90.
Vijaya Bank, PNB, Bank of Baroda, IDBI Bank, Just Dial, Edelweiss Financial, Petronet LNG, Suzlon Energy, Religare Enterprises, L&T Finance, Indiabulls Real, DLF, Nitesh Estates and Puravankara rallied 2-10% while TCS, Tech Mahindra, HCL Technologies and Wipro were trading in red.
The rupee today appreciated a sharp 69 paise, or 1.06%, to trade at an over one-week high of 64.63 against the dollar after the US-based rating agency Moody's upgraded India's sovereign credit rating.
The rally was supported by the dollar selling by exporters and banks and the US unit's weakness against some currencies overseas, traders said.
They said a spectacular opening in the equity market did its job.
In 2015, the rating outlook was changed to 'positive' from 'stable'. The 'Baa3' rating was the lowest investment grade -- just a notch above 'junk' status.
"The decision to upgrade the ratings is underpinned by Moody's expectation that continued progress on economic and institutional reforms will, over time, enhance India's high growth potential and its large and stable financing base for government debt, and will likely contribute to a gradual decline in the general government debt burden over the medium term," Moody s said in a statement.
The rupee had yesterday dropped by 11 paise to close at 65.32 against the US currency on fresh dollar demand from importers and banks after the US data raised prospects of rate hike by the Federal Reserve by the year-end that can trigger flight of foreign capital.
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