By Rahul Karunakar and Hari Kishan
(Reuters) - Uncertainty surrounding the timing of the U.S. Federal Reserve's interest rate hike has tempered analysts' forecasts for stock market gains this year, Reuters polls showed on Tuesday.
Global stocks have largely rallied since the start of the year, with several indexes at or close to record highs as more than two dozen central banks have eased monetary policy.
Chinese and most European stocks have led the way with a stellar run, buoyed by stimulus from the People's Bank of China and the European Central Bank.
But while the quarterly poll of around 300 analysts showed all of the 21 stock indexes surveyed are expected to rise between now and the year's end, it is less bullish than December's poll.
Fund managers and strategists also warned that the prospect of an interest rate rise by the U.S. Federal Reserve this year will create turbulence in global stock markets.
"The timing of the first hike in the Fed fund rate and its impact on the trend in global government bond yields will be a big factor in the coming months," said Patrick Moonen, senior strategist at ING IM.
The S&P 500 (SPX) index of U.S. stocks is set to rise 7 percent this year, its lowest annual gain since 2011 as a potential rate rise and a firmer dollar partly offset a strong economy.
Markets around the world have been provided with ample liquidity as several central banks have cut interest rates or printed money this year as inflation fell. That flow of cheap cash has pushed up both equity and government bond prices.
Despite expectations for a U.S. rate hike this year, disinflation risks would keep major sovereign bond yields from rising significantly, a separate Reuters poll showed last week. [US/INT]
EMERGING OR DEVELOPED?
Emerging market stocks are expected to spearhead gains even as developed markets shares rise modestly.
The majority of end-2015 forecasts for emerging market indexes - including India, Russia, South Korea, Mexico, Hong Kong and China - point to significant gains from Monday's closing levels. [EPOLL/CN] [EPOLL/IN] [EPOLL/RU] [EPOLL/BR]
The Shanghai Composite Index (SSEC) has had a spectacular run, gaining more than 17 percent this year, after a 50 percent leap in 2014.
By end-December the Shanghai benchmark is expected to be at 4,000 points, its highest since early 2008, and almost 6 percent above Monday's close of 3,787.69.
India's benchmark BSE Sensex equity index (BSESN) is expected to recover from a recent dip and reach a record high of 32,000 by end-December. [EPOLL/IN]
Taiwan's benchmark index (TWII) will be a laggard compared to its regional peers, predicted to rise only about 1 percent from Monday's close of 9,521.87 points.
Brazil's Bovespa stock index (BVSP) will hold pretty steady through the year despite a struggling economy, while Mexican stocks should track exports higher in coming months. [EPOLL/BR]
The fairly hefty gains seen in major Western stock markets in 2014 and this year are expected to slow.
The S&P 500 is set to dip to 2,073 by June, from Monday's close of 2,086.24, but rebound to 2,200 by year-end. That would represent a 5.5 percent gain from Monday's close and give a 7 percent annual return, lagging last year's 11.4 percent rise. [EPOLL/US]
"Ultimately we think the market is going to end higher, but it's not going to be a straight line by any means," said Dan Suzuki, senior U.S. equity strategist at Bank of America-Merrill Lynch. "We're looking for a lot of volatility."
European shares, though, are set to extend their brisk rally this year as the European Central Bank's massive asset-buying scheme and a weakening euro help revive economic growth and corporate profits. [EPOLL/FRDE]
The pan-European STOXX Europe 600 (STOXX) index is forecast to rise more than 6 percent from current levels to 425 points by the end of 2015.
The STOXX 600, up almost 17 percent year-to-date, is set to record its strongest first quarter since 1998 and outshine nearly all major asset classes.
Britain's top FTSE 100 (FTSE) equity index is expected to stutter in the run-up to a May national election but then recover to set new record highs. [EPOLL/GB]
(Additional reporting and polling from reporters in Frankfurt, Hong Kong, Johannesburg, London, Milan, New York, Paris, Sao Paulo, Seoul, Shanghai, Sydney, Tokyo, Toronto and Bengaluru; Editing by Susan Fenton)