Inflation Keeps The Markets Down

India’s headline retail inflation rate dropped to 7.04 per cent in May after touching a nearly eight-year high of 7.79 per cent in April.

Indian benchmark indicators Sensex and Nifty 50 plunged 2.90 and 2.76 per cent, respectively, as fear of recession in the US economy, surging inflation, rising corona virus cases and geopolitical tensions were delaying any recovery in the markets. Recently, World Bank’s President David Malpass said most countries are headed for a recession and warned about possible return to 1970s stagflation. In simple words, inflation plus stagnant growth equals to stagflation. In the broader markets, the BSE Mid-Cap slipped 2.35 per cent whereas BSE Small-Cap too fell 1.28 per cent.