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2011: the year of the bear

2011: the year of the bear
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There was a lot for traders to bear in 2011 which was an exhausting year for the world’s stock markets, particularly in Europe.

It was a time of extreme swings and volatility; nowhere more so than in Athens as Greece’s top shares lost a massive 60 percent of their value over the year.

Of the major markets, London’s FTSE 100 fell eight percent and it was the least worst performer. London’s losses were mild compared with France — down 21 percent — and Germany which fell 17 percent; that reflected the fact that they will end up paying most of the bailout costs for the Southern European states.

The share prices of Europe’s top 50 companies told a stark story.

Portugal’s problems and events in Libya turned things negative in March, but August saw the start of the biggest decline as the eurozone sovereign debt crisis exploded and the United States lost its prized triple A credit rating.

For the year ahead investors fret about more eurozone contagion, Greece having to leave the euro or even a complete break-up.

Mark Cliffe, Chief Economist at ING, speculated on what that could bring: “There’s absolutely no doubt in my mind that there would be huge declines in economy activity which would extend at least for a year or two.”

After an uncertain year of turmoil, one thing is certain global financial markets look set for more challenging times in 2012.