Any government at the center cannot overlook at inflation. If corporate sector and or investors want government to introduce pro growth policies, then inflation should be in the comfortable zone. With inflation rearing its ugly head, gdp growth is expected to decrease to 6-8% range and investors fled the market causing the stock market correction.

Rising commoditiy prices and agricultural produces causes inflation to rise and there is an indication today (March 19th 2008) that commodity prices may have peaked and are on a downward trend. Gold price and crude oil price have come down heavily today and also prices of potash.
This will definitely contain inflation and stock market may see good days again especially in India.

Wish you all a good luck for Friday March 21th market.