GLOBAL MARKETS WEEKAHEAD-It's a new year. Is the worst over?

By Jeremy Gaunt, European Investment Correspondent

LONDON, Jan 4 (Reuters) - Investors begin the first full week of 2009 trading on Monday with one question in mind: Is the worst over?

Given that a 38 percent loss on the broad U.S. S&P 500 stock index .SPX last year was actually one of the better performances on stock markets, it is hard for some investors to imagine otherwise.

Indeed, December ended on a rare up note, with global stocks putting in something of a rally.

MSCI's main gauge of global stocks, its all-country world index .MIWD00000PUS, gained almost 3.6 percent for the month, its first gain since May and the sixth best performance in two years.

Its generally riskier emerging market counterpart .MSCIEF -- one of the worst performers of 2008 with losses of 54.5 percent -- gained 7.6 percent in December, also its first gain in seven months.

Some sentiment indicators, such as the Reuters monthly investment polls, also showed some return to risk appetite [ID:nLM670530].

So it would not be a major surprise if some of the most recent gains spilled over into the new year because many investors have argued that stocks are attractively priced.

Many are also expecting financial markets to return to more normal patterns during the year.