Unfazed by the rising inflation at over 6.0 per cent, Finance Minister Jaswant Singh said on Wednesday that the government was confident it would be contained at 4-4.5 per cent annual average by March end, as projected by the Reserve Bank of India.

"Inflation has peaked. It is basically because of cyclical fluctuations contributed mainly by rising prices of petroleum products. I am confident that RBI target of 4-4.5 per cent annual average will be achieved," Singh told reporters after launching Tax Information Network in New Delhi.

Indian economy has the ability to absorb any global price hikes mainly on account of volatility in petroleum product prices, he said.

On the sharp fall in Sensex by about 3.0 per cent, Singh said he would not comment on daily market movement.

The stock market fell mainly on fears of a major selling pressure by foreign institutional investors following reports that the finance minister and Securities and Exchange Board of India were looking into the "large" inflows in recent times.

Battered continuously by investors, the Sensex plumetted by 164 points to close at 5758.19 points as against Tuesday's close of 5922.11.

Asked whether fiscal deficit would be on target at 5.6 per cent of GDP during 2003-04 as indicated by him earlier, Singh said, "Be patient ... Wait for a few days."

He apparently indicated that the picture would be made clear while presenting the vote-on-account on February 3.