Stocks set for range trading as central banks near end game

Global stock indices will end this year higher than where they started it but most are set to be confined to ranges in coming months even as central banks approach the endgame for interest rate rises, according to Reuters polls of market strategists.

Despite the drubbing in 2022 and starting the year on the backfoot, global stocks have recovered from March lows based on expectations that most central banks were done or nearly done with in some cases more than a year of raising interest rates.

The MSCI global stock index, which fell more than 8.5% between Feb. 2 and March 15 following the failure of a few U.S. regional banks, has since recouped nearly all of those losses and is up about 9% for the year.

Still, there is barely any improvement to the outlook for major indices at year-end compared to a survey taken three months ago before the turmoil. Year-end forecasts for 10 of the 17 indices polled May 10-24 have been downgraded.

This suggests stocks are no longer a one-way bet in the minds of investors like they were for swathes of the last decade, in large part because there is little scope for central banks swooping in to cut borrowing costs any time soon.

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