Starting in late 2023, the rally has pushed many indices close to lifetime highs and in some cases to new records on now-extinguished expectations that the U.S. Federal Reserve would start cutting rates as early as next month.

Although rate cut bets have been tempered, indexes have continued to gain on strong earnings and booming tech stocks, even as bonds have retreated.

The poll of around 150 equity analysts taken Feb. 9-22 showed all 15 major stock bourses surveyed were expected to rise this year, but only three were expected to gain more than 10%.

By comparison, only two failed to rack up double-digit percentage gains in 2023.

"We believe investors should be open-minded that there is a scenario in which rates need to stay higher for longer, and the Fed may need to tighten financial conditions," said global markets strategists at JPMorgan in a recent note.

Still, they added that the more than 20% rally in U.S. stocks since October "did not correct at all" despite the shift in rate expectations, saying that volatility was unusually low.

"Investor positioning has increased significantly over the past few months, which may present an increasing headwind for the market," they noted.

While higher-for-longer interest rates could cap gains, strong corporate earnings are likely to cushion stocks from any major falls despite high valuations.

A more than 85% majority of analysts, 71 of 83, who answered a separate question said corporate earnings would increase over the next six months.

When asked if there will be a correction in the next three months, analysts were almost evenly split, with 45 of 88 across 12 markets saying unlikely and the remaining 43 saying likely.

US, INDIA MARKETS TEND TO OUTPERFORM FORECASTS

Of the 15 bourses, U.S. and India indices have most frequently outperformed analyst expectations since at least 2010.

Backed by a strong economy, India's benchmark BSE index is forecast to add 8% this year, extending 2023's near 19% surge but the S&P 500 is seen gaining only 2.4%, a fraction of last year's 24% rally.

"The Indian economy remains a 'star performing' economy against other emerging markets," said Neeraj Chadawar, head of quantitative equity research at Axis Securities.

"Moreover, we firmly believe it will likely continue its growth momentum in 2024 and remain the land of stability against the backdrop of a volatile global economy."

Japan's Nikkei index, which has risen nearly 50% since end-2022 to hit a record high on Thursday, was forecast to hold on to its gains to trade around 39,000 by year-end.

The pan-European STOXX 600 advanced to an all-time high on Thursday boosted by technology stocks and is expected to gain around another 3% by year-end.

"We think Europe will see sluggish growth and a mild contraction in activity in the U.S. will affect earnings - even though we don't see an earnings recession, we think market expectations are high," said Amundi strategists.

Britain's FTSE, also forecast to rise about 3.0% from current levels to touch 7,900 by the end of the year, is the only index in the poll that analysts downgraded their outlook for. In a November poll it was seen touching 8,000.

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

(Reporting by Hari Kishan; Additional reporting and polling by correspondents in Bengaluru, Buenos Aires, London, Mexico City, Milan, New York, San Francisco, Sao Paulo, Tokyo and Toronto; Editing by Ross Finley, Kirsten Donovan)

By Hari Kishan, Indradip Ghosh and Sarupya Ganguly