Experts across the City have had to lower their market forecasts for 2009 after one of the most difficult years for shares ever.

Initial predictions that the FTSE 100 Index could beat its all-time high to hit 7000 or more in 2008 proved wildly off the mark.

The Footsie currently stands 34% lower than its opening mark of 6456.9 for 2008, which would represent the worst yearly performance in the 24-year history of the FTSE 100.

According to stock market historian David Schwartz, this year's performance even surpasses 2002's 25% decline. This fall would also be the second biggest annual slide of all time, only overshadowed by the 55.3% fall for the FTSE All-Share seen in 1974, he said.

The Footsie confounded any optimistic expectations as the credit crunch took hold across the global financial system, dragging countries into recession and sending shockwaves through stock markets.

These recent problems have made predicting the markets in 2009 a difficult task. The shifting composition of the index - with 16 companies leaving the top flight over the course of 2008 - has given would-be forecasters problems as the turnover of blue-chips has left them increasingly attempting to compare apples and pears.

Keith Bowman, equities analyst with stockbroker Hargreaves Lansdown, originally predicted the Footsie would hit 6900 this year.

This has been scaled back to a more modest advance to 5000 for 2009 - on the basis that stock markets tend to recover before economies, although he said: "It could just as easily be 3000".

"The trouble is that you are never comparing like with like. It is very difficult to predict where we will be in 12 months' time," he added.

BGC Partners senior strategist Howard Wheeldon has forecast a 10% rise to around the 4800 mark over the course of the year - but warns that things could get worse before they get better.

"We have got to batten down the hatches - the amount of jobs that will be lost in the first three months of the year will be horrendous," he said.

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