Britain's FTSE 100 index closed out 2008 on Wednesday with its biggest annual fall since its launch in 1984, sent reeling by the global credit crisis and looming world-wide recession. The UK benchmark registered its third straight daily rise, closing up 41.49 points, or 0.9 percent, at 4,434.17 in thin trade in a shortened New Year's Eve session.
But in the year it shed 31.3 percent compared with a 3.8 percent gain in 2007. The FTSE 100 fared better than Germany's DAX, down 40.4 percent for the year, and France's CAC, off about 42 percent. Defensive drugmakers were among the top-weighted gainers, with GlaxoSmithKline, AstraZeneca and Shire putting on between 0.4 and 2.2 percent.
The FTSE 350 pharmaceuticals and biotechnology index was the best performer among the FTSE 350 sub-sectors, up 8 percent in 2008. The industrial metals index was at the bottom, down nearly 84 percent this year. "The main concern (for 2009) is that actions taken by governments up to now may not alleviate the credit problem for companies," said Tim Whitehead, head of portfolio services at Redmayne-Bentley.
"If the problem has not been adequately addressed, then any initial optimism could wane and we could have a more difficult second half in 2009." Whitehead said there was a chance the markets may have factored in most of the bad news and he saw support for the FTSE 100 at around 3,800. "Hopefully, the actions taken by governments with interest rates and other measures will help in the first half of next year," he said.
Banks, at the epicentre of the financial storm, rose with HSBC up 2 percent, Standard Chartered gaining 4.9 percent and Barclays putting on 3 percent. Lloyds TSB, however, dipped 0.4 percent. The Financial Times said Lloyds had signalled its determination to see off demands from the trustees of the HBOS pension scheme for greater security for retirement benefits once its acquisition of the mortgage lender is completed.
HBOS advanced 0.9 percent and was the biggest FTSE 100 faller in 2008, losing 90 percent. Shares in market heavyweight Vodafone rose 2.1 percent, bringing their full-year loss to 27.5 percent, after Credit Suisse set a "trading buy" recommendation on the stock, saying sterling weakness has left earnings guidance and consensus beatable for mobile phone operator.
Oil producers were mixed, with weaker crude prices. Royal Dutch Shell, BG Group, Cairn Energy and Tullow Oil were down between 0.3 and 2.2 percent. But BP rose 1.2 percent. The FTSE 350 oil and gas producers index lost 16 percent for the year but still outpaced the banks index, down 56.8 percent, and the mining index, down 55.7 percent.
Randgold Resources, promoted to the FTSE 100 two weeks ago, was the top gainer among the blue chips in 2008, up 62 percent. The stock was down 1.5 percent on Wednesday. Among mining shares, BHP Billiton, Antofagasta and Rio Tinto advanced 0.9-2.9 percent. But Vedanta Resources, Kazakhmys and Eurasian Natural Resources were in the red.
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