Fund managers and equity strategists surveyed Feb. 9-21 expect the pan-European benchmark STOXX 600 index to reach 510 by year-end, surpassing 500 for the first time. It would imply a 3.7% increase from Tuesday's close of 491.90 and a 6.5% gain for 2024.

The closely-tracked index advanced on Thursday to an all-time high, boosted by technology stocks after an unexpectedly upbeat revenue forecast from U.S. chipmaker Nvidia.

Meanwhile, the Euro STOXX 50 index of the 50 largest and most liquid stocks in the euro zone is seen rising to 4,800 by the end of 2024, implying a 0.8% gain from Tuesday's close, the survey median found.

In 2023, Europe's STOXX 600 gained 12.7% and the Euro STOXX 50 over 19%, and so far in 2024 have added a respective 2.7% and 5.3%. The rally was highly concentrated in the last two months of 2023, as traders pinned their hopes on an AI boom and peaking interest rates as global inflation readings fell.

Money market traders are betting the European Central Bank will slash the base rate by over 100 basis points by year-end.. But such bets have been scaled back in recent weeks amid less dovish comments from central bank officials and robust data out of the U.S. and Europe.

"Everything centers on the macro, and whether the central banks cut rates as hard and as fast as the market has priced in," said Michael Field, European market strategist at Morningstar.

"There are plenty of reasons to think this won't happen exactly as the market wishes, which could lead to disappointment, and potential volatility," Field said.

Just under 60% of respondents said a correction in their local stock market was "unlikely" over the coming three months, while the rest said it was "likely".

Marco Vailati, head of research and investments at Cassa Lombarda in Milan, said a correction is likely due to "some profit-taking and a reality check of the exaggerated expectations of monetary policy accommodation."

Others said a correction is unlikely given that interest rate cuts will support stocks, also citing European valuations' relative cheapness compared to their U.S. counterparts.

"Positive impulses are expected from interest rate cuts by the European Central Bank, as well as from stimuli that China's government could implement for its economy," said Jochen Stanzl, chief market analyst for CMC Markets in Germany.

On Tuesday, China announced its biggest ever reduction in the benchmark mortgage rate as authorities sought to prop up the struggling property market and broader economy.

Polling showed Germany's DAX is expected to rise 2.5% by end-2024 from Tuesday's close of 17,068.43. It is currently trading at record highs.

A similar rise of 2.3% is forecast for Britain's FTSE 100, while France's CAC 40 is seen adding 2.0% by the end of the year.

A 71% majority of those polled expect corporate earnings to increase in their local markets over the next six months, while 29% anticipate a decrease.

"Since the start of the year, estimates of earnings per share in 2024 have been revised lower, while we have moved from a "hard" to a "soft" to a "no-landing" global narrative," said Ankit Gheedia, head of Europe equity & derivatives strategy at BNP Paribas.

This has narrowed the gap between analyst expectations and BNP's model earnings forecast, Gheedia said, and as a result does not think earnings will be a downside risk for European equities in the near term, barring adverse shocks.

(Other stories from the Reuters Q1 global stock markets poll package:)

(Reporting by Lucy Raitano; Additional reporting by Samuel Indyk and Danilo Masoni; Additional polling by Sarupya Ganguly and Sujith Pai, Editing by William Maclean)

By Lucy Raitano