Stocks can be a good investment options even a inflation rises relentlessly, here’s what to buy

Retail inflation in India has gone up to 7.4 per cent, which means RBI has failed to bring it down to its targeted level of 6 per cent for the third straight quarter. The wholesale inflation on the other hand has gone down, which means less is being spent on commodities and raw materials traded in bulk between businesses. Inflation is set to go higher in India since members of RBI’s monetary committee are also considering pausing or going slow on interest rate hikes, aimed at buckling demand by limiting cash flow.

Regulators prioritising growth?

But as RBI seems to be prioritising growth in times when a global recession is approaching, this may be a good opportunity to invest in corporate stocks. Although prices are going up, it also means that companies pass on pass on the higher costs to consumers, while catering to demand in the markets. If you are holding a strategically diversified portfolio of stocks from sectors that are set to make more money as growth outpaces inflation, it can deliver high returns in the longer run.

India doing better despite headwinds

Even though growth forecast has been slashed for economies across the world, the IMF has stated that India is doing better than most developed economies, which are expected to contract. The IT sector in India is also confident of sailing through the recession, while SBI Chairman has also stated that India won’t be as affected as other countries because of the downturn.

Stocks to look for

Commodity producers as well as metal and oil producers will naturally benefit from inflation, as they deal in essentials, while telecom will also gain an advantage. Apart from those stocks, shares from the banking sectors can also provide resilience amid rising inflation. Once growth picks up, investors can expect hefty returns from stocks which were already maintaining a growth trajectory.