HONG KONG - ASIA'S markets closed on Wednesday to bring down the curtain on a miserable year that saw them lose half their worth in the wake of the global financial meltdown.

Despite a number of bourses gaining some ground over the past few days, the overall picture for 2008 has been one of gloom as the worst economic crisis since the 1930s tore into investor confidence and battered stocks.

By the close of trading on Wednesday Hong Kong and Singapore had been almost halved over the year, Sydney lost more than 40 per cent and Shanghai nearly two-thirds.

Tokyo was 42.12 per cent down and Seoul 40.73 per cent when they closed for the year on Tuesday.

Markets have been hammered by the world economic crisis, which was sparked by the collapse of the sub-prime, or high risk, mortgage market in the United States. This led to US mortgage giants Freddie Mac and Fannie Mae being taken over by the government in September.

But shares went into a tailspin soon after following the failure of Wall Street banking icon Lehman Brothers under a mountain of debt. Giant insurer American International Group then had to be bailed out by Washington.

A US$700 billion (S$1.05 trillion) rescue package for the ailing industry was unable to stop the rot and world markets saw record falls and rises as they headed down.

On Wall Street, the Dow Jones was also battered and by the close of trading on Tuesday it was 34.65 per cent off its 2007 finish.

Hong Kong finished the year 48.3 per cent down on its 2007 close - its worst annual percentage fall in 34 years.

The benchmark Hang Seng index ended on Wednesday 1.1 per cent up from the day before but its closing figure of 14,387.48 points is 13,425.17 lower than 12 months ago.

And Peter Lai, sales director of DBS Vickers, told AFP: 'We have not reached the bottom yet. The worst will come when investors start to sell their shares in panic next year.' He believed the Hong Kong index could drop to somewhere around 10,600.

Sydney ended 1.9 per cent higher on Wednesday but still closed the year 41.3 per cent lower than the end of 2007, shedding 2,617 points over the year to finish at 3,722.3.

'It was certainly a year everyone would rather forget, with the S&P/ASX200 index losing 2,617.5 points,' said IG Markets analyst Ben Potter.

Global financial chaos wiped almost US$415 billion from the Australian market in 2008.

With Japan also in recession, the year could not have been worse for investors as the Nikkei, Asia's biggest index, dived on the back of suffering exporters due to a rising yen.

'It was a year beyond our imagination,' said Kazuhiro Takahashi, an analyst at Daiwa Securities SMBC.

Singapore closed 2008 down 49.17 per cent, while the powerhouse economy of China was unable to prevent the Shanghai bourse from feeling the effects of the global meltdown as it lost 65 per cent. Taipei was 46 per cent down.

The decimation of the markets was also reflected in plummeting oil prices.

Crude began the year breaking US$100 a barrel for the first time before soaring to more than US$147 in July and then going into freefall as fears over the world economy sank in and demand for energy dried up.

The region's other markets were also shattered, with Bangkok down 47.56 per cent on the year, Manila 48.29 per cent, Wellington 32 per cent, while Kuala Lumpur had lost 39 per cent and Mumbai and Jakarta more than half.

SHANGHAI
Chinese shares closed slightly lower on Wednesday to end the year down 65.5 per cent - the steepest annual loss in the market's 18-year history, dealers said.

The benchmark Shanghai Composite Index, which covers A and B shares, closed down 12.11 points, or 0.66 per cent, at 1,820.81 on turnover of 33.5 billion yuan.

The Shanghai A-share index shed 12.76 points, or 0.66 per cent, to 1,911.79 on turnover of 33.4 billion yuan, while the Shenzhen A-share index was down 7.70 points, or 1.31 per cent, at 581.51 on turnover of 20.5 billion yuan.

HONG KONG
Hong Kong share prices closed the year Wednesday down 48.3 per cent from 2007, marking the worst percentage fall in 34 years as the global economic crisis hit hard.

But the market ended Wednesday's shortened trading session 1.1 per cent higher, following overnight gains on Wall Street and light window dressing by fund managers, dealers said.

The benchmark Hang Seng Index rose 151.98 points at 14,387.48. Turnover was light at HK$19.47 billion (S$3.6 billion).

ICEA said 2009 would be a year the market would test the bottom, but expected the economy to recover in the next year as financial institutions clean up their balance sheets and take advantage of the government's monetary and fiscal policies.

The market will be closed on Thursday for the New Year holiday.

KUALA LUMPUR
Malaysian shares closed 0.6 per cent lower on Wednesday in quiet trading, led by banking and utility stocks, leaving the key index 39.3 per cent lower over the year, dealers said.

The Kuala Lumpur Composite Index lost 4.88 points to close at 876.75 on the last day's trading of the year. -- AFP