The FTSE 100 index lost 31.3% in 2008, its worst annual decline since it was created in 1984, and following a 3.8% gain in 2007.
It edged up 0.94% to 4434.17 on the last trading day of the year today, a gain of 41.49 points.
Banks, at the centre of the financial storm, were among the biggest losers of 2008 ranging from HBOS, Royal Bank of Scotland and Lloyds TSB to Barclays. Mining companies Kazakhmys, Xstrata and Rio Tinto also fared badly as the economy worsened.
Drugmakers AstraZeneca and GlaxoSmithKline were among the best-performing stocks on the FTSE. British Energy was another big gainer, up more than 40% in a year in which the government secured the sale of its stake in the nuclear power firm to French energy giant EDF.
David Buik at BGC Partners talked of an "annus horribilis by any standards".
