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Global Stock Markets Lost $6.3 Trillion in 2011

Sunday, 01 Jan 2012 09:39 AM

Global stock markets saw $6.3 trillion in value wiped out in 2011 thanks largely to the European debt crisis, which roiled markets for a good chunk of the year.

Worldwide stock market capitalization fell 12.1 percent to $45.7 trillion, the Financial Times reports, citing Bloomberg data.

The euro, meanwhile, which held up rather well for most of the year despite ongoing economic uncertainty, finally began to slide as 2011 came to a close and the future of the currency zone came into doubt.
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"Investors were more optimistic at the start of the year, but as the year progressed they were forced to come to grips with the debt levels in the western world," says Navtej Nandra, the international head of Morgan Stanley’s asset management arm, the Financial Times adds.

The S&P 500 ended 2011 flat, while in the U.K., the FTSE 100 lost 5.5 percent.

In Europe, the damage is more telling.

The Eurofirst 300 gauge of blue-chip European companies fell 11 percent in 2011, led by the French and Italian bourses, while the MSCI Emerging Markets index shed a fifth of its value, the FT adds.

Japan's Nikkei index lost 17.3 percent in 2011, a year marked by a devastating earthquake and tsunamis, while Hong Kong’s Hang Seng index fell 20 percent and the Shanghai Composite was down 22 percent.

The Dow Jones Industrial Average, meanwhile, finished up 5.5 percent at 12,217.56.

Europe wasn't the only culprit, as political bickering over how to fix the economy in the U.S. spooked investors as well.

Many investors grew weary of the massive swings in stock market indices.
"It has been such a difficult year," says Rick Bensignor, the chief market strategist for Merlin Securities, according to the New York Times.

"Things changed on a dime."

And while Europe and the U.S. won't solve their problems overnight, investors will likely move into 2012 somewhat more prepared for volatility.

"Investor reaction should continue to get better," says Jack A. Ablin, chief investment officer of Harris Private Bank, the New York Times adds.

"For as lousy as Europe’s news is, it has got to be the slowest moving train wreck in the history of the financial world. It’s the stuff that comes over the transom that kills us."

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Global stock markets saw $6.3 trillion in value wiped out in 2011 thanks largely to the European debt crisis, which roiled markets for a good chunk of the year. Worldwide stock market capitalization fell 12.1 percent to $45.7 trillion, the Financial Times reports,...
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Sunday, 01 Jan 2012 09:39 AM
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