2008 stock trading year: German shares record considerable drop in value

The 2008 stock trading year got off to a turbulent start: Triggered by the US subprime crisis, which ushered in the international financial crisis, the gloomy outlook on economies the world over unsettled market participants on both national and international markets. Massive support packages, the U.S. Federal Reserve’s prime rate cuts and action taken by western central banks to stabilize the situation on world markets briefly calmed the mood. However, concern about a worldwide economic downturn increasingly determined activity on stock markets. Substantial rises in crude oil prices and the euro’s all-time highs over the US dollar proved detrimental. The world financial crisis peaked in the autumn of 2008, pulling international stock markets into a long downward spiral. This was caused by the collapse of a major U.S. investment bank. Concurrently, fears over a global economic downturn depressed sentiment on stock markets. Aid packages and interest-rate cuts implemented by governments and central banks on both sides of the Atlantic led to a short-lived recovery. Massive sell-offs ensued, augmented by expectations of an impending global recession. By the end of 2008, the DAX had lost 40.4 per cent of its value, closing at 4,810 points (prior year: 8,067 points). Second-line indices displayed even poorer performance. At 5,602 points (prior year: 9,865 points), the MDAX closed the year down 43.2 per cent, while the SDAX dropped to 2,801 points (prior year: 5,192 points), which represents a decline of 46.1 per cent.