* FTSE MIB to make steady gains
* Banks to outperform
MILAN, Dec 8 (Reuters) - Italy's blue-chip stock market index is seen rising steadily through to end-2011, supported by an improvement in the economy and lower market volatility, led by bank stocks, a Reuters poll showed on Wednesday.
The FTSE MIB is seen rising almost 2 percent to 20,500 points by mid-2011 and by over 9 percent to 22,000 by the end of 2011, from Tuesday's close of 20,112.44, according to the median of 23 respondents in a Reuters poll taken over the past week.
That would still mean the 40-share benchmark index remained well below its 2010 high of 24,059 reached early in January.
The latest forecast for mid-2011 is also below the 23,000 median forecast respondents gave in September.
"Italian stocks should recover from the current low level as the prospects for 2011 are quite positive," Deutsche Bank's Italy investment chief Giorgio Mascherone said citing analysts seeing a 5-7 percent average rise in 2011 earnings.
UniCredit's equity strategist Tammo Greetfeld sees a fall in the FTSE MIB in the first half of 2011 based on spiralling concerns over debt in euro zone periphery nations and the fear of a spill-over in Italy.
But he expects an improvement later in the year.
Some respondents see Italy outperforming other European bourses, after a poor performance this year, with the heavy weighting of banks pulling up the index.
Schroders private bank investment director Mario Spreafico cited positive factors such as "a pick-up in banks and a good trend in the economy", adding small cap industrials are another of his picks for a rise in 2011.
(Reporting by Elisa Anzolin and Nigel Tutt; Additional polling by Bangalore Polling Unit; Editing by Jon Loades-Carter)