Analysis from S&P Dow Jones Indices found only New Zealand escaped the December doom, rising by 2.3 per cent, while 47 other global main markets lost money.
Stockmarkets in emerging economies were the worst affected, with the S&P Emerging Markets index falling 4.9 per cent, compared to the 1.4 per cent drop of the S&P Developed World index.
Russia’s stockmarket was the worst performing in both December and 2014 as a whole, as the plummeting oil price weighed heavily on its energy-heavy index.
Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, said the oil price drop was likely one of the main influences behind the broad fall across equity markets.
“Although the lower cost helped consumers, it has diminished sovereign income, both directly and via lower taxes on products,” he said.
Mr Silverblatt added that in December further headwinds to the markets came from “continued talk of another round of recessions in Europe” and data that showed “Japan was already officially in [a recession]”.
Other markets that suffered double-digit declines in December included Greece, whose index fell by 15.7 per cent after the country’s parliament failed to elect a president and was forced to call a snap election in early 2015.
Current polling in Greece suggests the election, scheduled for January 25, could hand a majority to anti-European Union party Syriza, which has again brought to the fore fears about the future of the eurozone.
Other peripheral European markets bore the brunt of investors’ fears in December, as Portugal, Spain and Italy were the three biggest fallers among developed market indices.
The widespread December falls capped off a rough period for many equity indices, which saw 30 of the 48 stockmarkets register a loss for the year.
Emerging markets suffered a second consecutive year of losses, losing investors 2.1 per cent after the December drop pushed the index into the red. On closer inspection, the sector had mixed fortunes during the year. Some countries, such as India, recorded rises of more than 20 per cent and 11 of 23 emerging stock markets rose in 2014.
While the S&P Developed World index rose by 2.4 per cent in the past year, it was dragged into positive territory by the 10 per cent gain from the US, which dominates the global index. Remove the US from the results and the remaining developed markets suffered an average loss of 6.4 per cent.
The US was the best-performing developed market index in 2014 and the second-best overall performer in December.
Mr Silverblatt said the US stockmarket had been the “major beneficiary” of recent macro economic trends “as its economy continued to slowly (but steadily) improve, and the dollar continued to grow stronger”.
Private investors gripped by a ‘wave of pessimism’ in 2014
Private investors seem to have met the turbulent markets at the end of 2014 with a “wave of pessimism”, according to research from Capita Asset Services.
Capita’s latest private investor watch study found evidence of “indiscriminate selling” from private investors as they fled the FTSE in the final months of last year.
Between September and November, private investors dumped £9.1bn worth of shares, the sharpest sell-off recorded since Capita began its research nine years ago.
Capita said the sell-off reversed “more than three years of investment” from private investors, dropping the proportion of the UK equity market held by this subgroup to 11 per cent.
The decline continued into December but was not as steep as in the previous three months.
The Capita study found private investors selling shares in every sector of the UK stockmarket, the first time that had happened since 2011.
Financial stocks bore the brunt of the sell-off, with private investors jettisoning £2.5bn from the sector.
Justin Cooper, chief executive of shareholder solutions at Capita Asset Services, said the “wave of pessimism” in markets meant private investors “took fright on a scale far beyond that which greeted the Lehman crisis and subsequent global depression”.
