Concern as WPI inflation touches 10-month low of 2.76 pc.

Wholesale Price Index inflation in January touched a 10-month low of 2.76 per cent, a sharp 100 points lower than consensus estimates. But, according to SBI Research, the decline may not be just a data aberration but a cause for serious concern.

More so because manufactured products, imported core and domestic core, all declined in unpredictable fashion, possibly due to slower global growth and in large metal-consuming geographies like Europe, US and China and due to dumping of food products in India.

Going further, a slowdown in China's real estate sector and the weakening auto sector due to a trade war, besides the impact of Brexit on Japanese auto makers, who will likely pull out of the UK, will add more stress to base metals.

"We are thus convinced about a monetary easing by RBI in April and will not be surprised if the rate cut is of larger magnitude," reasoned Dr Sowmya Kanti Ghosh, Chief Economic Advisor, SBI Group.

Manufactured products inflation, which has a weightage of 64.23 per cent in the WPI, declined to 2.61 per cent in January, from 2.96 per cent in the same month last year. Fuel and...