Indian retail inflation likely slipped marginally in February, thanks to lower food prices, according to economists who still warned that surging oil prices will push inflation much higher in future
Nomura pointed out that even though the outlook for banks remains positive, a prolonged conflict-like situation would be negative for global growth
International oil benchmark Brent crude, which briefly hit more than $139 a barrel in the previous session, was up about 2.6% at $126.42.
A sustained rise in oil, food prices would have adverse impacts on Asia's economies. India, Thailand and the Philippines are the biggest losers, while Indonesia would be a relative gainer, Nomura said
"Inflation pressures in India continue to emanate largely from supply side factors, and the recent print also reflects adverse base effects," Shaktikanta Das said
Retail inflation for farm workers and rural labourers rose to 5.49 per cent and 5.74 per cent, respectively in January mainly due to higher prices of certain food items
But for the first time in the past 30 years, the US reported a higher consumer price inflation (CPI) rate than India in five consecutive months
A large across-the-board increase in interest rates is a cure worse than the disease
She stated that the objective of the Budget is a stable and sustainable recovery in the economy
The benchmark 10-year bond yield spiked to a 2-1/2-year high after the government announced a borrowing target of 14.95 trillion rupees ($199.84 billion) for the next fiscal year
The Indian economy is staging a gradual recovery, but the environment - both local and global - remains challenging given the upside risks to inflation
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Led by a sharp rise in commodity prices, especially crude oil, and supply-side issues, most economies across the globe have been battling rising inflation over the past few months
A 10 per cent increase in crude oil prices, according to Nomura's estimates, may raise India's headline inflation by around 30 basis points (bps), add around 0.3 per cent of GDP to CAD
Companies as diverse as the Indian unit of Unilever Plc and Tata Motors are increasingly complaining about pricier inputs.
The temporary supply shocks that have led to higher inflation has been kept aside by the MPC while focusing on growth
In terms of valuation matrix like P/E or P/BV, many stocks forming part of the broad index would be expensive compared to long-term averages, Sachin Trivedi of UTI AMC said