1. Profit booking post the rally in 2013, doubts over the strength of the Chinese economy coupled with concerns on emerging market currencies saw the global markets coming off from the peak.
2. Overlooking the turmoil in emerging market currencies, the Federal Reserve opted to reduce its monthly bond purchases further.
3. Fund flows into India also lost some steam though FIIs continued to remain net buyers for the month.
4. On the economic front, IIP data continued to disappoint and was impacted by slowdown in consumption.
5. While the CPI and WPI inflation declined in December, the core inflation remained resilient and even inched upwards.
6. This prompted the RBI to go for a hike in repo rate, a move which took the markets by surprise.
By Dipen Shah, Head- Private Client Group Research, Kotak Securities
NOTE: The views expressed are those of the author