Markets not fully pricing in possibility of higher inflation: Analysts

India's March wholesale price index-based inflation (WPI) surged to 14.55 per cent on rising edible oil prices and increase in power prices. WPI inflation in February stood at 13.11 per cent.

Inflation is becoming a sore point for the markets, said analysts, who expect the frontline indices to fall further in case the galloping inflation is not tamed. At the current levels, the markets, they feel, are not fully factoring in a possible rise in inflationary pressures.

“The Sensex and Nifty can fall another 3 per cent – 4 per cent from the current levels if the inflation rise is not checked. The Russia - Ukraine war is also showing no signs of an early resolution. All this is adding fuel to the fire,” said G Chokkalingam, founder and chief investment officer