India wholesale inflation jumps
India’s wholesale price inflation hit an 11‑month high of 2.13% in February and is forecast to climb to ~3.2% in March as global commodity and food costs rise — a signal for local margins and input‑cost pressure Times of India WPI report. Traders tracking EM flows note that rising WPI plus higher energy costs could widen policy divergence and shift allocations away from cyclical EM exposure.
The official WPI press release shows manufactured products — which carry a 64.23% weight in the basket — inflation at 2.92% and primary‑articles inflation at 3.27%, while the Fuel & Power group remained negative year‑on‑year at −3.78%. (pib.gov.in) Month‑over‑month data in the same release recorded a 0.25% rise in the WPI for February, with Manufactured Products up 0.47% and Fuel & Power up 1.17% from January. (pib.gov.in) Independent trackers and rating agencies expect a sharper jump next month: ICRA projects a March WPI around 3.2% (a multi‑quarter high), India Ratings forecasts about 3.7% for March, and CareEdge sees WPI averaging near 3.5% in FY27 under its Brent assumptions. (tribuneindia.com) Global energy markets have tightened sharply since February — Brent crude climbed to roughly $103/barrel in mid‑March amid Middle East escalation — a change that increases the risk of wholesale pass‑through into Indian producer prices. (tradingeconomics.com) Market economists warn that sustained Brent near $100 would materially raise inflation forecasts and squeeze corporate margins; CareEdge analysts said average crude at those levels could push FY27 inflation well above earlier estimates. (economictimes.indiatimes.com) Portfolio managers are already adjusting positioning: emerging‑currency option prices show traders bracing for near‑term EM currency pain, investors are seeking hedges and defensive allocations, and fund‑flow datasets such as EPFR are being watched for rotation away from cyclical EM exposures. (bloomberg.com)
