Calm before a storm?
The year end is usually a quiet time for markets, as fund managers prepare for their annual vacations.
This year proved to be different as equity markets came tumbling down on the back of the decline in oil prices and a sharp fall in the Russian rouble.
This round of volatility provides a taste of things to come.
We see three themes that will dominate the markets in the coming year - the rise in US interest rates and the associated change in the direction of capital flows, the fall in oil prices and the slowdown in China.
On US interest rates, the Federal Reserve has just pronounced that it will take a "patient" approach in raising rates.
Although unemployment is declining as the US economy recovers, inflation remains low and there is no urgent need to increase interest rates.
Text: Abheek Barua and Bidisha Ganguly, Business Standard
Image courtesy: Wikimedia Commons