New Delhi, Sep 14 : Chances of a sudden downside dislocation are also rising in equity markets following the upside surprise in US inflation, foreign brokerage Morgan Stanley said in a report. Tuesday's US CPI print was a clear upside surprise versus consensus both for headline (8.3 per cent) and core inflation (6.3 per cent). This surprise rapidly exposed recent positioning away from the US dollar into risk assets, with Nasdaq falling 5 per cent and Fed Fund Futures now discounting at least a 75 bps hike at the next FOMC on September 20-21 and a non-negligible chance of a 100 bps hike, the report said. "For our coverage markets we think the chances of a sudden downside dislocation are also rising," Morgan Stanley said. "We recommend continuing with a broad UW Tech, Semi and Internet stance and expect near term further declines away from our June 2023 base case targets and towards our bear case targets, particularly for MSCI EM (890 or 9 per cent downside), Hang Seng (17,000 or 12 per cent downside) and MSCI China (55 or 15 per cent downside)," Morgan Stanley said. Ritika Chhabra, Economist and Quant Analyst, Prabhudas Lilladher, said the US inflation in August rose higher at 8.3 per cent y-o-y against expectation of 8.1 per cent. The CPI index increased 0.1 per cent month on month while the economists were expecting it to decline by 0.1 per cent over the month due to sharp correction in energy prices. High costs of food, housing, transportation and other services reiterate the strong consumer demand and elevated service sector price pressures. With inflation being 'stickier' than expected, it is highly likely that the Fed will go for another jumbo rate hike of 75bps in its next FOMC meeting on September 21, Chhabra said. /IANS