* Taiwan main index seen at 9,500 points by end 2011
* Very small number say market to end 2011 lower
* Apple, China plays likely to extend rally
By Faith Hung
TAIPEI, Dec 8 (Reuters) - Better business ties with China will likely push the Taiwan market closer to the 10,000 point milestone by the end of 2011, after hitting two-and-half-a-year closing highs this month, according to a Reuters poll of 11 fund managers and analysts.
The quarterly outlook on the island's stock market found most analysts remaining bullish, with only a small portion looking for the benchmark TAIEX index to trade lower than where they are now by the end of 2011.
But the road to the rally is unlikely to be smooth. While the U.S. and other developed markets keep interest rates zero-thin to boost economic growth, central banks of emerging markets, including Taiwan and China, are under growing pressure to raise rates further to fight off inflation.
"Inflation in these markets will not rise to a point where it is unmanageable, at least not in 2011, but it's going to be a big risk for investors," said Albert Hsieh, an assistant vice president of Shin Kong Financial's fund unit.
Taiwan's broader market is seen at 9,500 points by end-2011, according to the median forecast of the poll, taken over the past week, 9 percent higher than Wednesday's 8,703.79 point close. Two of the 11 polled projected 10,000 points.
The median forecast would mark the highest level since 2008 and represents a 16 percent gain from the 8,188 point close at the end of 2009.
Companies expected to benefit from China's robust economic growth included banks and real estate developers, as ties between the two former political foes are improving at their best levels in 60 years.
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Suppliers of Apple's popular iPhone 4 and iPad, and smartphone maker HTC will probably continue to outperform the market thanks to rising demand, those fund managers and analysts said.
($1=T$30.1) (Additional reporting by Carol Lee, additional polling by Bangalore Polling Unit; Editing by Jon Loades-Carter)