European shares will move in a tight range going into the year-end and during 2019, a Reuters poll showed today.

Slowing growth, political risks and worries over Washington's protectionist policies are keeping European investors on the sidelines. 

European and euro zone indices have fallen 8-10% so far this year, lagging Wall Street, as analysts have been cutting their earnings growth forecasts amid a weakening economic outlook and tensions over Italy's budget.

The pan-European STOXX 600 benchmark index is expected to reach 365 points by the end of the year, according to the poll of 27 brokers, fund managers and analysts, 1.9% above Monday's close of 358 points but 6.2% down on the year. 

The Euro STOXX 50 index of top companies is expected to reach 3,250 points by the December 31, 2.4% above Tuesday's close of 3,172 points but down 7.2% on the year. 

Analysts said that nobody really wants too much of a risk exposure to euro zone equities as Brexit uncertainty and a possible trade war with the US are continuing to spook investors.

They added that while short-term bounces are always possible and likely, a complete turnaround won't be possible until there is less uncertainty prevailing in the markets. 

The poll was taken between November 19-26 when world stocks tested lows hit at the end of October following a brutal sell-off that wiped off trillions of dollars of market caps. 

The latest forecasts are weaker than in the previous August poll, which forecast the STOXX 600 climbing to 400 points by the end of 2018 and Euro STOXX 50 hitting 3,575 points.

At the time European corporate earnings were expected to rise more than 6% in 2018 but growth expectations have since been scaled back to a rate of below 5%.

On top of that, the normalisation of monetary policy by the European Central Bank, which is seen ending its massive €2.6 trillion monetary stimulus scheme at the end of this year, is unlikely to provide any support. 

Relatively cheap valuations for some euro zone companies however could provide support, even though European benchmarks are expected to remain next year well below the highs hit earlier in 2018.

Investors also said much of Europe's performance will depend on Wall Street.