* Stocks heading for rare plus month after huge annual
losses
* Dollar gains against major currencies
* Wall Street set for positive open
(For winners and losers of 2008, double click [])
By Jeremy Gaunt, European Investment Correspondent
LONDON, Dec 31 (Reuters) - World stock markets closed out
the year on Wednesday with some having registered their worst
annual losses in history, although December looked set to end on
a rare up note and there was some optimism about 2009.
Dollar was broadly higher while oil <CLc1> fell below $38 a
barrel, a more than 60 percent loss for the year. Wall Street
looked set to open slightly higher.
Global stocks as measured by MSCI <.MIWD00000PUS> were flat
on the day but heading for their first monthly gain in seven
months.
Over 2008, however, they have fallen a record 43.8 percent,
wiping around $14 trillion off the index, which is a major
benchmark for global investors.
The pan-European FTSEurofirst index <>, meanwhile, was
heading towards an annual loss of around 45 percent for the
year, although it was up 1.2 percent on Wednesday.
Britain's FTSE 100 <> closed down around 31.5 percent
for the year, its biggest loss since launch in 1984. Japan's
Nikkei <> closed the year on Tuesday, down 42 percent, the
biggest annual drop in its 58-year history.
Many investors, however, are hoping for a better year in
2009, somewhat reflected in December's performance.
"If there's any optimism, it's on the basis that stock
markets recover in recessions," said Justin Urquhart Stewart,
director at Seven Investment Management.
"Now we have the real recession, rather than the phoney
recession. Last year we were so optimistic, that we were fooling
ourselves. It's now gone too far the other way. We've discounted
a huge amount of bad news."
DOLLAR GAIN FOR YEAR
The euro <EUR=> was en route to posting a 3.9 percent fall
against the dollar this year -- its first annual drop since 2005
-- while the U.S. currency is seen gaining roughly 5.5 percent
against a basket of currencies <.DXY>.
The yen slipped slightly, prodding the dollar <JPY=> up to
90.50 yen. The Japanese currency was 2008's standout, soaring as
the financial crisis prompted a massive unwinding of carry
trades -- borrowing in the low-yielding yen to invest in
higher-yielding assets elsewhere.
Sterling stood out as the major currency loser in 2008. Its
near 27 percent slide against the dollar <GBP=> this year would
be the biggest since the gold standard was abandoned in 1971.
Euro zone government bond markets were closed. Two and
10-year euro zone government bond yields fell to their lowest in
nearly two decades on Tuesday.
(Additional reporting by Brian Gorman; editing by Tony Austin)
