Stockmarkets around world suffer worst year on record

[Pastor Dale Morgan]

*Perilous Times

Stockmarkets around world suffer worst year on record*

• FTSE 100 has lost 32% of its value in 2008
• Russia down 72% and China off 65%

* Julia Kollewe
* guardian.co.uk, Wednesday 31 December 2008 09.02 GMT

London and most other major markets around the world have suffered their
worst 12 months on record, as turmoil in the financial system and the
worst global recession since the 1970s sent shares reeling.

With just a few hours of trading left for 2008, the FTSE 100 index has
lost about 32% this year, its worst annual decline since it was created
in 1984. It opened 40 points higher this morning at 4433 in a half-day
session ahead of the New Year break.

Overnight, Wall Street took heart from Washington's expanded bail-out of
the embattled auto sector, with the Dow Jones industrial average closing
up 2.2%. The Dow is off nearly 35% so far this year.

Despite recent gains, Europe's FTSE Eurofirst 300 index is on course to
end the year with a 45% drop - its worst annual decline since the index
started trading in 1986.

"The landscape has been completely changed," said Lucinda Chan of
Macquarie Securities in Sydney. "People's confidence needs to be
rebuilt, and that has to come through the stimulus packages around the
world that are being put out by various governments."

Other markets have already closed for the year. The worst-performing
stockmarket this year was Russia's, where the key RTS index fell by 72%.
Second worst hit was China's benchmark Shanghai composite index which
plummeted 65% - its largest-ever annual drop - after soaring more than
300% over 2006 and 2007.

"China's economy is obviously at a turning point. There are too many
uncertainties, and past huge losses have made investors increasingly
cautious," said Cheng Weiqing, an analyst at Citic Securities in Beijing.

Across Asia, stocks suffered record falls this year, a painful change
from its once-booming markets. In Tokyo, the benchmark Nikkei closed for
the year yesterday having recorded its biggest annual percentage loss on
record. Modest gains in December – the first since May – did little to
mitigate a yearly loss of 42%, with the world's second-largest economy
in recession.

Hong Kong's Hang Seng index ended the year 48% lower, its worst annual
drop since the global oil shock of the early 1970s. India's main index
in Mumbai plummeted by 52%.

The London Stock Exchange will close at 12.30pm, and Euronext's Paris,
Amsterdam and Brussels markets close at 1pm GMT while a number of
markets such as Germany, Austria, Denmark, Finland, Norway, Sweden,
Italy, Spain and Switzerland have already closed for the year, as have
markets in Asia.