FTSE 100 Records Biggest One-Year Drop Since 2008 Financial Crisis


The FTSE 100 has recorded its biggest one-year drop since the financial crisis 10 years ago.

The leading stock index of London was 12.5 percent lower at the end of the year as compared with the beginning of the year, wiping over £240 billion off the combined value of its constituent firms.

The markets have been beaten during the year by the anxieties over a trade war between China and the United States of America, and global economic slowdown as well as Brexit concerns.

The FTSE 100 ended a shortened day of trading on New Year’s Eve at 6728. Only little has changed on the day, meaning that it closed at 960 points lower as compared to its level at the beginning of the year.

It is almost 1200 points lower than the record high that was achieved by the FTSE in May this year.

The trading across global markets has been particularly volatile in the run-up to the Christmas – a period when most investors are traditionally more accustomed to a “Santa rally” boosting the values.

Instead, a cocktail of concerns – many of them focused on the confrontations of Donald Trump, the President of the United States of America, with China over trade and with the US Federal Reserve over the interest rates – have dragged the shares down.

The signs of more festive sentiment fluttered into life shortly after Christmas when the Dow Jones of New York recorded a record-breaking rally of over 1000 points in a single day and the FTSE 100 had its best session since April.

However, it was still not enough to gloss over a grim year for the shares.

The annual drop for the FTSE 100 was the first slump over the course of the year since 2015. It is also the largest annual percentage drop since the financial crisis – when it lost a third of its value 10 years ago.

The sliding share values affected investments such as pension funds as well as trackers that follow the value of the FTSE 100.

Among individual stocks, British American Tobacco has been severely affected, losing 50 percent off its share price over the year, after the United States proposed a crackdown on menthol cigarette sales.

Taylor Wimpey, a house builder, was down by approximately a third. It is among the firms in the sector that were affected by worries over the housing market – which have largely been blamed on the uncertainty surrounding Brexit.

Meanwhile, retailers including Marks and Spencer, which is off by a fifth over the course of the year, have been under pressure as the sales of the high street are affected by fragile consumer confidence.