The stunning cofessions by Satyam [Get Quote] chairman B Ramalingaraju on large scale manipulations in the company's accounts is likely to result in a loss of confidence of foreign investors in India in the near term, rating agencies said on Wednesday.
"This will definitely send negative signals to the investor community in the near term. There will be widespread impact on the sentiments.
"However, over a period of time, the confidence will be restored in the market," Global rating agency Standard & Poor's Region Head Ravi Mohan told PTI.
However, market regulator Securities and Exchange Board of India will take appropriate actions to restore discipline in the market through appropriate steps, Mohan said.
Echoing this view, Fitch Ratings' managing director Amit Tandon said that the developments in Satyam would have an adverse impact on the stock markets and on investor sentiment, in the short term.
"The developments in (Satyam) definitely will have an impact on the general sentiments in the market in the short term. But this is not a systemic issue and is unlikely to impact other players in the long term," Tandon said.
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