The sector won’t be able to repeat the trick in 2002: it is being disbanded because, with just eight companies, it is now regarded as too small.Two speciality finance companies were particular winners this year. Man Group entered the FTSE 100 in September having shed its sugar trading business in the mid-Nineties to focus on running hedge funds. As an investment class, these came into their own in 2001 as investors sought ways to beat the depressed equity market, and Man shares have risen 93.5 per cent. Among the mid-cap stocks, the bonds brokerage Icap – the renamed Garban Inter-Capital – has seen its shares surge 180 per cent despite having its New York offices destroyed in the World Trade Centre attacks.The changed world following 11 September also changed the outlook for a number of smaller companies, leaving investors with big gains. Acambis, which won an emergency contract to supply the US government with enough smallpox vaccine to innoculate the population against a bio-terrorist assault, saw its shares rise 238 per cent in 2001, while Biotrace International, which makes an anthrax detection kit, has soared 343 per cent.But the biggest stock market return this year has been won by the hardened gambler. Those who punted on Edinburgh Oil & Gas at 20.5p at the end of 2000 now have shares worth 127.5p – a whopping 522 per cent gain.

The discovery of the Buzzard oilfield in the North Sea, one of the largest finds in over a decade, has left Edinburgh sitting on up to 15 million barrels of oil.. The London stock market ended 2001 with a large loss for the second year in a row, the first time this has happened since the global crisis of the 1970s. The performance capped a bad year for the index, which ended down 1,005 points on the year, or 16.2 per cent – the index’s worst annual performance since its inception in 1984. Hilary Cook, a director of investment strategy at Barclays Stockbrokers, said: “It’s been a year that we’ll all be heartily glad to forget. Every time the market has looked like it might rally, something has come along to dampen it.”But British investors were not alone. In New York, Wall Street delivered the worst year for the broad market since 1974.

The Standard & Poor’s 500 was on track to close down about 12 per cent In 1974, the S&P 500 fell nearly 30 per cent European markets also slumped. The Dow Jones Stoxx 600 fell 17 per cent, its biggest decline since calculations began nine years ago. In Japan, the Nikkei share average ended the year at 10,542.62, a 24 per cent fall over the year despite a 0.8 per cent rise on the last day of trading Very few markets boasted a gain on the year. Turkey topped the table with a 92 per cent gain, followed by Taiwan, which surged 51 per cent over the year. South Korea gained 38 per cent on the year, while Australia closed the year 7 per cent ahead.Last year was not short of possible causes for one of the worst bear markets in history.

At its epicentre was the end of the longest unbroken run of economic growth in the United States. The surprise cut in interest rates by the US Fed on 3 January – the first of 11 – woke many investors up to the realisation that the economic cycle had not, as some had claimed, been abolished. In fact by March the world’s largest economy had gone into recession. The impact on the stock market was heightened by the fact that the corporate sector was bearing the brunt of the slowdown.At its heart was the bursting of the New Economy bubble that had seen an explosion in investment in hi-tech stocks and equipment. As this unwound, firms cancelled orders with their suppliers and ran down their stocks instead. World markets had already fallen substantially by 11 September when two airplanes destroyed the twin towers of the World Trade Centre, although the horrific event had a devastating short-term impact on consumer confidence.Meanwhile, stock markets in other countries, especially Europe, which had seen themselves immune from the end of the US economic miracle, fell when it rapidly become clear that they too faced recession.