New Delhi, March 14 -- Rising geopolitical tensions and elevated crude oil prices are adding new risks to the macroeconomic environment and could create upward pressure on inflation, according to a report by SBI Funds Management.

The report noted that the recent geopolitical developments have added an additional layer of risk to the overall macro environment, particularly if crude oil prices remain elevated for a prolonged period. Higher crude prices could lead to upside inflation pressures and may also influence the policy response of the Reserve Bank of India across various market segments.

It stated "On asset allocation, we continue to be neutral equities expecting positive albeit moderate returns, with preference for large caps over...