Steady gains for world's stock markets

Major stock markets around the world are likely to make steady gains over the coming year despite economic uncertainty and a lingering euro zone debt crisis weighing on sentiment, polls of more than 300 strategists found.

While there will be no return to the massive rises seen by some indexes in 2009, double digit returns will not come as a surprise to investors.

Emerging markets are once again predicted to provide investors with bigger returns than their rich world counterparts, many of which will be forced to undergo tough austerity measures.

Brazilian stocks will gain more than 15 per cent by the end of next year as Latin America's biggest economy grows at a more sustainable pace. Fellow BRIC members Russia, India and China will see their key indexes rise 22, 19 and 16 per cent respectively by the end of next year.

China has boasted one of the strongest economic growth performances this year but policy controls to rein in real estate speculation and a clampdown on bank lending has spooked investors.

China and India's voracious demand for natural resources will underpin gains in Australia's benchmark index as the country looks towards its 20th straight year without a recession.

Russia's dollar-based index rose a staggering 146 per cent in 2009 and the more modest gains predicted for the coming year are still double what has been seen in 2010.

There are fears that an ongoing fiscal crisis in Europe, which has so far seen the European Union and International Monetary Fund bail out Ireland and Greece, could spread to other countries using the euro, with repercussions across the world.

Governments have spent hundreds of billions of dollars on economic stimulus packages and bailouts of banks, leaving a financial headache that will need to be paid back through budget cuts and tax rises.

Countries have seen unemployment remaining high but confidence in the outlook has begun to pick up and data has been surprising markets to the upside.

France's index, which has lost over 3 per cent of its value this year, is seen up by 10 per cent by the end of next year as liquidity remains abundant and companies post strong profit growth. Export-oriented Germany's index may reach a near four-year high by the end of 2011.