Happy New Year?

What a year 2011 was for the world stock markets.

The United Kingdom’s FTSE 100 fell 5.6 per cent in 2011, while France saw stock falls of 18 per cent and German stocks fell 15 per cent as fears for the survival of the euro bit. But United States stocks ended 2011 up. The euro has ended 2011 close to a 15-month low against the US dollar.

The crises in the eurozone has had a huge impact on world markets, as investors await a plan to ensure that Italy’s government can continue to support its mounting debts. The United States and Europe, including the United Kingdom, have had to accept that it may be many years before their debt ridden economies get back to normal.

Also in 2011 the United States lost its AAA credit rating, following deadlock in Congress over raising the country’s debt ceiling - or the legal limit on the federal government’s total borrowing.

But 2011 has been dominated by the euro crisis and the euro ended the year close to a 15-month low against the dollar after it shed more than 3 per cent last week. Many analysts suggest that it could drop even further in 2012.

France and Germany could bear the brunt of any bailout costs for the southern European states - and this has been reflected in the performance of their equity markets.

France’s Cac 40 dropped 17.5 per cent and Germany’s Dax fell 14.7 per cent in 2011. The United Kingdom’s FTSE 100 index is 5.6 per cent lower on the year, worries over the impact of the eurozone crisis did most of the damage.

Will 2012 be any better?

This entry was posted on 01/01/2012 at 01:54 pm and is filed under Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.