| May 27
Can rising inflation derail market recovery? Here's what experts believe
The Indian market is witnessing a decent recovery, taking heart from the signs of easing the second wave of COVID-19.
Market benchmarks - Sensex and Nifty - are getting close to their all-time highs of 52,516.76 and 15,431.75, respectively, that they hit in February. In the month of May so far, Sensex and Nifty have risen nearly 5 percent each.
This post-second wave of COVID-19 rally could extend and the market could soon hit fresh record highs. The risk factor, however, is the rising inflation, which is affecting investors` appetite.
Commodity prices have been rising of late, fanning worries that higher inflation rate may make central banks re-think their policy stance.
Retail inflation is used by the monetary policy committee (MPC) for policy formulation. With the growth yet to recover from the COVID-impact and inflation staying close to the upper band, the MPC has been on a pause mode.