European stock markets limped to the end of another grim year today, nursing losses of up to 45 per cent over 12 months, as investors hoped for better times for global equity markets in 2003.
There was little year-end celebration in dealing rooms across Europe with most regulars still away from their desks between the Christmas and New Year's Day holidays.
The DJ Euro Stoxx gained 0.9 per cent to 2,386.4 points in early dealing, leaving the pan-euro zone index down about 37 per cent over 2002 as a whole.
The British FTSE 100 index of leading shares gained 0.5 per cent to 3,920.4 points in early deals, meaning that it lost about 25 per cent over the year, the biggest annual drop in its 17-year history.
The Paris CAC 40 index stood at 3,052.2 points, down 34 per cent over the year. Frankfurt's DAX 30 index fared even worse, down 44 per cent over 12 months at 2,892.6 points as the year drew to a close.
It is a far cry from the upbeat forecasts being pencilled in by stock market analysts this time last year.
The fallout from a slew of corporate accounting scandals at US titans such as Enron and WorldCom shook investors' faith in firms' balance sheets, while war clouds over Iraq frayed the nerves of company executives and investors alike.
"I think WorldCom and particularly Enron were probably the prime cause of a real shaking of confidence and a re-basing of profit forecasts and companies really lowering expectations," said Barclays Stockbrokers strategist Ms Hilary Cook.
"Just when maybe corporate confidence was beginning to improve along came Iraq," she said, adding that the last time markets had fallen by so much over three years had been in the Great Depression in the 1920s.
The FTSE 100 index of leading shares on the London stock market, the largest in Europe, neared the year-end nursing the biggest loss in its 17-year history in percentage terms.
The index is down over 40 per cent from its all-time high seen in December 1999, and up less than 10 per cent from its September nadir, which was the lowest level for over six years.
Analysts are predicting better times for European shares in 2003 as a pick-up in corporate earnings helps to mend battered sentiment, with some pencilling in gains of over 20 per cent.
AFP