Posted on 12/31/2002 9:31:39 AM PST by MadIvan
World stock markets have racked up a third consecutive year of losses, making the current share price slump one of the longest on record.
The decline reflects sluggish economic growth, weak corporate profits, a spate of accounting scandals in the US, and fears over war in Iraq.
With no obvious trigger for a recovery in sight, the slump is now drawing comparisons with previous traumatic share price collapses such as the 1929 crash or the financial meltdown that followed the oil price shock of 1973-74.
On Wall Street, the Dow Jones index of blue-chip US shares - which sets the tone for stock markets world wide - is on track to finish the year about 17% lower, while London's FTSE 100 settled down 24% on Tuesday.
Europe's woes
Over on mainland Europe, investors have had an even more torrid time of it.
On Monday, Germany's benchmark Dax index finished the year a massive 44% lower, making it the worst performing major stock index of 2002.
In France, returns on shares were only slightly better, with the Cac heading for a loss of about 33% compared with the start of the year.
There has been no respite either for investors in Japan, where the Nikkei index settled 19% lower on the year on Monday, posting its weakest year-end close since 1982.
But the full extent of the share price rout is best illustrated by looking at the major markets' performance since they reached their peak valuations at the tail-end of the late 1990s technology boom.
The FTSE 100 is now down 43% from its all-time high of about 6,900, which it reached on New Year's eve 1999.
The Dow, meanwhile, has fallen 28% from its January 2000 peak of 11,700, notching up its first three-year losing streak since 1939-41.
Turning around?
According to stock market historian David Schwartz, the decline is approaching in severity the kind of collapse usually associated with "catastrophic" events such as a serious military setback during wartime.
However, historical analysis suggests that a recovery may be waiting in the wings, he believes.
"We are at the deep end of a normal bear market. But history teaches us that we may be at or near the bottom," Mr Schwartz told BBC News Online.
One factor which may lift stocks next year is the 2004 US Presidential election, which is likely to boost investor sentiment as candidates start pledging better times to come.
"Over the last half century, every time there has been a US Presidential election, UK stocks have risen the year before," Mr Schwartz said.
Emerging hope
And while investors in the major global stock markets are unlikely to have made much money this year, stocks in emerging market economies have decisively bucked the gloomy trend.
In Pakistan, the top 100 shares on the Karachi Stock Exchange have soared by more than 100% since the start of the year, making it the world's best performing stock market by far.
Elsewhere in Asia, double digit annual gains were recorded on the Sri Lankan and Thai leading share indexes, while stocks also rose, albeit more moderately, in Indonesia and India.
And in crisis-torn Argentina, the Merval share index finished the year 62% higher than it began, lifted by signs of an economic recovery and hopes of a new financing deal with the International Monetary Fund.
It always amazes me that people just don't get it that the markets began their downward spiral in 1st Q of 2000. Such a short memory. The markets were tanking for one full year before GWB was inaugurated.
Not that I expect rat trolls to understand such things.
Why don't you stop taking so many hits off the bong you disgusting socialist sycophant. Your strategy is to tax people to death. Oh yeah, that works real well.
Happy New Year, Ivan!
May the screams of the babies that you and your kind are happy have been aborted torment you in your sleep forever.
Ivan
Go back to Democrat Underground. Do you realise how big the borders are, how many miles of coastline have to be sealed and so on to achieve this "border closed" fantasy you wish to continue? Do you have any idea of the disruption of trade? Speaking as someone who just visited the United States, it IS much harder to get in.
This childish nonsense you indulge in that says by a stroke of a pen that the borders can somehow be magically hermetically sealed is ridiculous. Grow up.
Ivan
I disagree...Markets closed with monthly bearish englufing patterns...I think we are in for more downside...Dow around 6000, S&P 700, Compx under 1000...Gold 450...dollar down....
Thats my view from this crows nest...
And I can never figure out why the dims don't get it that we have a 2-party system.
They're as bad as the taliban, hating everyone who isn't like them. Real sore-losermans (sore-losermen?). Shows how totalitarian they really are, that they can't be gracious losers now and then.
Bull. The January 1973 crash took 12 (twelve) years to break even, for one fully invested at the beginning.
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