STOCK markets around the world are set to pick up -- but experts have warned against heralding a market recovery.

Bury-based personal finance adviser Nick Thompson says that investors should consider a cautious return to stocks and shares as the longest slump for 60 years shows signs of coming to an end.

His comments follow a Reuters poll of 100 strategists, which predicts that markets will end this year higher than last -- driven by modest improvements in both the economic outlook and corporate profits.

But Mr Thompson, who works for DTE, thinks any recovery is likely to be gradual, and that investor expectations should reflect the new reality.

"I think we are now in an upturn that could last for many months, if not a year or two.

"But the days of regular double digit stock market gains may now be a thing of the past with more reasonable returns of possibly five per cent per annum being the norm."

Mr Thompson added: "It is certainly advisable not to rush into the market for short-term gains."

Expected stock market gains from now until the end of the year range from just one per cent for the US Dow Jones index, to 10 per cent for the volatile Taiwan index.

Britain's index of leading shares, the FTSE 100, is predicted to end 2003 at 4,300 -- above the 2002 close of 3,940 and March's eight-year low of 3,277, when the market was braced for a war with Iraq.

Graham Secker, of London-based Morgan Stanley, said: "The risks are probably on the upside for the first time in a long, long time."

Market gains are attributed to recent reductions in interest rates, US tax cuts and a reduction in economic concerns caused by the initial outbreak of Severe Acute Respiratory Syndrome (SARS).

Another key factor has been growing evidence that corporate earnings are no longer falling. In the first quarter, earnings of the main US companies shot up 11.6 per cent.