MILAN (Reuters) - A record-breaking run in European shares has made them more vulnerable to possible pull-backs in the latter part of 2024, although the region's recovering economy and the start of a rate-cut cycle is seen pushing them back to new peaks in 2025.

Fund managers and equity strategists surveyed from May 13 to 22 see the STOXX 600 index at 513 points by end-2024, implying a 1.9% fall from Tuesday's close.

The region-wide index, home to popular large-cap stocks such as drugmaker Novo Nordisk and tech group ASML is set to rise again in 2025, reaching 537 by end-June and a lifetime high of 556 by year-end.

Meanwhile, the Euro STOXX 50 index is seen treading water for the rest of the year, while in 2025 it should resume its ascent to reach 5,400 by end-December, closing in on the record high of 5,522 it set in March 2000.

"European equities have had a strong first half of the year and it is possible they hit pause over the summer months," said Moz Afzal, Global CIO of EFG Asset Management in London.

"That being said, falling inflation, growth that has bottomed out, and less restrictive monetary policy mean the economic fundamentals are falling into place for a strong 2025."

Some 73% of respondents - eight of 11 - said a correction of more than 10% in their local stock market over the coming three months was unlikely, while 27% saw such a drop as likely.

Year-end forecasts for the STOXX 600 range from a low of 435 to as high as 600 points. In the upbeat camp is Barclays strategist Emmanuel Cau who remains "tactically" overweight on Europe.

"The region may benefit further from upcoming rate cuts and consequent boost to activity," he said.

On the other end of the spectrum is Andreas Bruckner, European Equity Strategist at BofA Global Research who sees the index sliding to a low of 450 in the first half of next year after a correction of more than 10% due to U.S. economic weakness.

So far in 2024, the STOXX is up around 9%, supported by heavyweight stocks, strength across banks, and more recently utilities and real estate, which have rallied in anticipation of interest rate cuts in Europe.

'ATTRACTIVE' MULTIPLES

Some respondents to the poll expect Europe to fare relatively better than Wall Street if markets do correct thanks to its cheaper equity valuation and a more diversified market.

The STOXX 600 trades at around a 33.6% discount to the S&P 500, per LSEG estimates on a price/earnings metric, which is almost twice as much as the average discount in the past 20 years.

"Given multiples are more attractive than in the United States, the European market is probably less prone to violent corrections," said Enrico Vaccari, head of institutional sales at Consultinvest in Milan. "If inflation does not rear its head, the path for rate cuts is marked. Markets are looking for that."

Investors expect the European Central Bank to start lowering borrowing costs from their current record highs at its upcoming meeting in June. Currently, markets are pricing in around 65 basis points of ECB rate cuts in 2024.

Polling also showed Britain's FTSE was seen falling 1.4% to 8,300 points by end-2024 and then rising to a new record of 9,300 by end-2025.

Similarly, Germany's DAX is seen dipping to 18,692 points by end-2024 and then rebounding to a new peak of 20,250 by the end of next year.

Italy's FTSE MIB, which is heavy in bank exposure, is seen rising further to 36,498 by the end of 2024 and then reaching 38,606 in 2025, its highest since late 2007.

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

(Reporting by Danilo Masoni in MILAN and Samuel Indyk in LONDON; additional polling by Indradip Ghosh, Pranoy Krishna and Purujit Arun in BENGALURU; Editing by Gareth Jones)

By Danilo Masoni and Samuel Indyk