The stock market in 2015: from a new FTSE high to a crash, the year for investors in review

It's been a turbulent year for investors. We take a closer look at the year that was.

Investors enjoyed a positive start to 2015. Well-founded hopes that interest rates would stay low, combined with signs that the Greek crisis wasn’t getting any worse, saw the FTSE 100 break through the 7,000 level for the first time in its history. It peaked in April at 7103.98.

Things soon turned sour though, with the FTSE 100 finishing the year a whopping 14.8% below that peak. The main reason for the sharp decline was the decimation of the commodities sector, as a result of fears over China’s slowing economy.

But all the blame for investor’s woes in 2015 can’t be laid solely at the door of China. “Closer to home, uncertainty over when interest rates will rise, a general election, and numerous Budget changes have combined with China woes to cause a volatile year for UK shares,” says Heather Ferguson, investment analyst at Hargreaves Lansdown.

Here’s how the UK markets performed over 2015:

FTSE 250’s home focus boosts returns

The past 12 months may not have been pretty for anyone invested in a FTSE 100 tracker, but the FTSE 250 tells quite a different story. The index is up almost 7% in comparison to the FTSE 100’s drop of nearly 8%.

This is down to the fact that the FTSE 250 is more domestically focused, so it has escaped the worst of the damage caused by concerns about China.

Several FTSE 250 companies have had fantastic years. Betfair Group is the index’s top stock for the year up 158.62% over the past 12 months thanks to its merger with rival Paddy Power. It’s closely followed by JD Sports. The retailer’s share price has more than doubled since January, rising 115.23%.

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The stocks that won in 2015

It wasn’t all bad news in the FTSE 100 though, as some stocks delivered impressive gains:

The nation’s builders had a particularly good year, with three making it onto the stars of 2015 list. A combination of continued low interest rates and a Government determined to underpin the housing market with its Help to Buy scheme has helped Taylor Wimpey stand out as the top performing stock in the FTSE 100, with a share price rise of 46%. Strong performance from Barratt Developments and Persimmon put both of them in the top 10 too.

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The dogs of 2015

At the opposite end of the spectrum here are the FTSE 100’s worst performing stocks in 2015 – the so-called dogs of the market:

A quick glance at the worst performing stocks reveals that the commodities slump has claimed many victims. The list includes five mining firms, one oil company and an engineer that serves the mining and oil industries.

“We may look back in five years and view this as a great buying opportunity. These sectors are deeply unloved,” says Danny Cox of Hargreaves Lansdown. “On measures such as price to book and price to cyclically-adjusted earnings, valuations for the oil and mining sectors are at multi-decade lows, although remember prices could still fall further.”

This year has served as “a reminder that, when it comes to equity investing, you need to invest for at least five years and preferably ten years,” says Annabel Brodie-Smith, communications director at the Association of Investment Companies.

“This year’s ‘hot’ sector or company may not be so ‘hot’ next year, so it’s important to take a long term view, do your research, have a balanced portfolio and seek advice if you are in any doubt before investing," she concludes.

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