FTSE 100 tumbles 31% in worst year on record

Banks take a pummelling, with HBOS slumping by more than 90 per cent

Global equity markets notched up record losses in 2008, with the UK's benchmark FTSE 100 index recording its worst performance since launching 24 years ago.

HBOS was the worst performing stock on the FTSE 100, slumping more than 90 per cent as the banking crisis gathered pace, forcing it to seek capital from shareholders and the Government, and ultimately driving it into the arms of Lloyds TSB, the rival with whom it is set to merge in 2009.

The blue chips as a whole were down a bruising 31 per cent, while the junior FTSE 250 index, seen as more representative of the UK economic picture, lost around 40 per cent of its value last year. The market, which is closed for business today, will resume trading tomorrow.

Japan's Nikkei 225, down 42 per cent, also recorded its biggest loss on record last year. New York's S&P 500, down 38.5 per cent over the past 12 months, has suffered its steepest decline since the Great Depression.

In the UK, besides HBOS, Royal Bank of Scotland is the other notable loser in the banking sector, shedding more than 86 per cent of its value since last January. Like HBOS, RBS had to seek the assistance of the Government, which is now its single largest shareholder.

"Increasing signs of weakening economic conditions, coupled with clear signs of persisting liquidity and capital pressures in the banking sector, have taken their toll on UK and equity markets more generally over the past year," according to market strategists at Cazenove.

The fallout is clear in a survey of the FTSE All Share index, which ranks the blue chips alongside counterparts from the FTSE 250 and the FTSE Small Cap indices.

Johnston Press, down 94 per cent, is the worst off. Besides grappling with the decline in advertising, the Edinburgh Evening News publisher has come under fire as investors sold out of companies saddled with high levels of debt.

Taylor Wimpey is next from the bottom with a loss of 93.4 per cent. Again, the stock, which began the year in the FTSE 100 but now sits in the more modest company of the small caps, faced the twin pressures of a slowdown in the housing market and a large debt pile.

Debt also came to haunt the FTSE 250-listed Punch Taverns, the pubs group that lost an eye-watering 92.4 per cent as the market began to question the tenanted pub model. The specialist finance group Cattles was the weakest among the mid-caps, losing 92.9 per cent of its value in 2008.

On the upside, Randgold Resources won the race on the FTSE 100, clocking up gains of almost 60 per cent as investors sought to increase their exposure to gold, the traditional safe haven in times of economic turmoil.

British Energy, buttressed by the bid from France's EDF, came second, gaining 40.9 per cent, while Astra-Zeneca, up 29.7 per cent, was third among the blue chips.

On the FTSE 250, Telecom Plus, a provider of low-cost utilities, fared the best, up more than 65 per cent.

But no one came close to the AIM-listed Sirius Petroleum, which soared 576 per cent. Formerly called Global Gaming Technologies, the company changed its name in September and is seeking opportunities in the oil and gas sector, with a particular focus on Nigeria. Equator Exploration, which is also focused on oil and gas in West Africa, came second, rising by 183 per cent.