By Sudip Kar-Gupta
LONDON (Reuters) - European stock markets will rise from now until the end of 2015 although will remain below peak levels reached earlier in the year, according to a Reuters poll in which analysts slashed forecasts from just three months ago.
The Reuters poll of around 30 traders, fund managers and strategists gave a median year-end forecast for the pan-European STOXX 600 index of 371 points, while the euro zone's blue-chip Euro STOXX 50 index was seen at 3,400 points.
In a June poll the respective forecasts were for 415 and 3,794.
Taken in the past week, the poll also forecast a year-end close of 10,312 points for Germany's DAX and 4,794 points for France's CAC, well below June's 12,000 and 5,270 forecasts.
While the poll forecasts the DAX rising some 5 percent from Monday's close of 9,814.79 by the end of 2015, it would also imply the DAX will not get anywhere near its record high of 12,390.75 points reached in April this year anytime soon.
European stock markets fell nearly 10 percent in the third quarter of this year, hit by signs of a slowdown in China - the world's second biggest economy - and uncertainty over when the United States might raise interest rates.
The Reuters poll forecast European stock markets rising further into the first half of 2016, but traders and strategists cautioned of volatility ahead, partly due to uncertainty of what impact any U.S. rate rise would have on markets.
Higher interest rates can often be bad for stock markets, as they boost returns on bonds and cash.
"I foresee a global correction across the board being triggered in the first or second quarter of next year," InterTrader strategist Steve Ruffley said.
Others said even if the Fed did raise rates soon, European equities would be propped up by the European Central Bank's programme of economic stimulus measures.
They said signs of a recovery within the European economy would also help the region's stock markets.
France's CAC rose sharply on Monday after data showed French services activity accelerated in September more than previously thought.
"Positive factors include the fact that the euro zone's economic statistics continue to show a strengthening in the economy," said Isabelle Enos at BNP Paribas (PARIS:BNPP)' B*Capital division.
Spain's IBEX is set to reach 10,300 by year-end, the poll found, while Italy's MIB is seen climbing to 22,615 points. That would mark 3 percent gains on Monday's close for both.