World stocks slip as year-end nears

World stocks slipped and the dollar was stable on Wednesday as investors wound down for the year after booking stellar gains in a recovery rally stretching back to March.

Japan's Nikkei, for example, slipped 0.9 percent on in its final 2009 session, but still has a 19 percent gain for the year after recovering the bulk of the losses suffered since the collapse of U.S. bank Lehman Brothers last year.

In Europe, where some bourses will still be open on Thursday, the FTSEurofirst 300 was down 0.6 percent, but still looking at annual gains of around 25 percent.

"The business for the year has been done and unless we have any unexpected announcements the market will not move much in either direction until the New Year," said Howard Wheeldon, strategist at BGC Partners.

World stocks as measured by MSCI were down 0.4 percent, with an annual gain of more than 31 percent likely. MSCI's emerging market stock benchmark was flat.

Emerging market stocks have been among the big winners in 2009, with final gains likely to be more than 70 percent.

Discarding losses at the beginning of the year, the two MSCI indexes have gained 75 percent and 108 percent, respectively, from March lows.

Investors, meanwhile, are entering the new year in a cautiously optimistic mood.

State Street said on Tuesday that its global investor confidence index had broken a three-month decline in December, rising to 103.9 from 100.8 in November.

A reading of 100 is neutral with anything above that indicating increasing degrees of bullishness.

STRONGER DOLLAR

The dollar was flat to higher against a basket of major currencies, but hit a two-month high against the Japanese yen.

"The dollar has been helped by year-end buying, plus we have seen some yield hunting by Asian names which has helped dollar/yen," said Geoffrey Yu, currency strategist at UBS in London.

The dollar was up 0.1 percent at 92.11 yen and flat against the euro at $1.4352.

Euro zone government bonds were flat.