World stocks brought down the curtain on a miserable year with modest gains but 2008 will be remembered for key markets shedding half their worth as the global economy endured a disastrous slowdown. Despite a number of exchanges gaining some ground over the past few days, the overall picture for 2008 has been one of gloom as the worst economic crisis since the 1930s tore into investor confidence and battered equities.
In morning European trade, London was up 0.84% and Paris gained 0.76%. However both markets, due to shut early ahead of New Year celebrations, were set to record massive annual losses.
U.S. stocks revved higher ahead of their final 2008 session on Dec. 31 after a government rescue announced for finance firm GMAC and its former parent General Motors boosted hopes for a recovery in the troubled U.S. auto sector.The Dow Jones Industrial Average jumped 2.19% as a rally gathered momentum late on Dec. 30.
"These developments will substantially ease the upward pressure that we have seen on auto loan borrowing spreads, and provide greater access to auto loan credit for American households," said Brian Bethune at IHS Global Insight. "The landmark deal... is indeed path-breaking in terms of the scale of the response of the Treasury and the Federal Reserve to the economic and financial crisis that has enveloped the U.S. economy."
Wall Street's firmer showing gave a boost to those Asian markets still open, which then carried on into European hours. Frankfurt ended its year on Dec. 30, closing with a daily gain of 2.24%. During 2008 however, the German exchange shed a massive 40% -- a pattern mirrored elsewhere.
By the close of trade on, Hong Kong and Singapore had almost halved in value over the year, Sydney lost more than 40% and Shanghai nearly two-thirds -- the steepest annual loss in the Chinese market's 18-year history.
Tokyo was 42.12% down and Seoul 40.73% when they closed for the year on Dec. 30.
"We have not reached the bottom yet. The worst will come when investors start to sell their shares in panic next year," Peter Lai, sales director of DBS Vickers in Hong Kong, said.
Markets have been hammered by the world economic crisis, which was sparked by the collapse of the sub-prime, or high risk, mortgage market in the United States. This led to the U.S. government takeover of mortgage giants Freddie Mac and Fannie Mae in September.
Copyright Agence France-Presse, 2008
