$6.3 Trillion Wiped Off Global Markets in 2011

cnbc.com/

Almost $6.3 trillion was erased from global stock markets this year as the euro zone financial crisis reverberated across the world in the latter half of 2011, calling into question the future of the world’s largest currency bloc.

Global stock market capitalization dropped 12.1 percent to $45.7 trillion according to Bloomberg data, while the euro ended the year as the worst performing major currency after finally starting to succumb to the continent’s financial and economic woes in December.

The euro had proved resilient for much of the year – burning hedge funds that bet on a steeper decline – but on Friday touched a 10-year low against the Japanese yen, and is near lows against the dollar last touched a year ago.

“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,” said Navtej Nandra, the international head of Morgan Stanley’s asset management arm.

The S&P 500 is flat this year while the FTSE 100 has only dropped 5.5 percent. But the Eurofirst 300 gauge of blue-chip European companies has lost 11 percent, led by the French and Italian exchanges. The MSCI Emerging Markets index has shed a fifth of its value despite strong growth in China and other emerging markets.

Asian equity markets were hit particularly hard with Japan’s Nikkei index losing 17.3 percent this year, Hong Kong’s Hang Seng index 20 percent and the Shanghai Composite 22 percent. More >>