* Stocks heading for rare plus month after huge annual
losses
* Dollar gains against major currencies
(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 $39 a
barrel, a 60 percent loss for the year.
Global stocks as measured by MSCI <.MIWD00000PUS> were up
slightly on the day, setting the stage for their first monthly
gain in seven months.
Over 2008, however, they have fallen a record 43.7 percent,
wiping around $14 trillion off the index, which is a major
benchmark for global investors.
The pan-European FTSEurofirst index <>, meanwhile, was
down around 45 percent for the year, although it was up 0.6
percent on Wednesday.
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."
The London Stock Exchange was to close at 1230 GMT and
Euronext's Paris, Amsterdam and Brussels bourses at 1300 GMT.
Germany, Austria, Denmark, Finland, Norway, Sweden, Italy,
Spain and Switzerland were already closed for the year.
DOLLAR GAIN FOR YEAR
The euro was steady against the dollar in thin trade, but it
was poised to record its first annual fall against the dollar in
three years.
The dollar also gained against a basket of currencies <.DXY>
for the first time since 2005.
The euro has fallen by around 3.4 percent against the dollar
over the year. However, it recovered towards the end of the
year, jumping by over 10 percent during December, a trend
analysts expect will continue.
The euro rose 0.1 percent against the dollar <EUR=> to
$1.4064.
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)
