According to BBC News, the share index closed for the last time in 2008 at 4,434 points - down by 31 percent on 2007.
The index has not fallen by such a large amount since it first opened in 1984.
Financial institutions were among the worst hit by falls, with HBOS and Royal Bank of Scotland both ending the year down by approximately 90 percent.
Randgold was the best performer, with its values increasing by 60 percent.
Share expert Martin Slaney predicted that the stock market misery is not over yet but suggested that there could be a recovery during the latter half of 2009.
"Shares will remain volatile in the first quarter and then as the economic backdrop improves in the second half equities should start to pick up," he remarked.
The Nikkei 225 index also closed down today with a 42 per cent decline measured over the last 12 months, the Times reported.