Australia's stock market, already one of this year's best performers in Asia-Pacific, could rise another 10 percent in 2014 on the back of expectations for upgrades to corporate earnings, strategists say.
The country's benchmark stock index is trading at about 5,320. That's down about 2.5 percent from a five-year peak hit in late October, but still up a respectable 14.7 percent so far this year and way ahead of the MSCI Asia-Pacific index which is up about 9 percent this year.
(Read more: Australia to be 'odd one out' in 2014: Goldman Sachs)
"We've just upgraded our total share-holder return outlook on the Aussie market for the rolling 12 months, so fair value on the ASX 200 index is now 5,894," said Martin Lakos, division director at Macquarie Private Wealth.
"That's up another 10 percent from here and driven largely by upgrades to earnings that's coming up. For investors, certainly we think they should be setting portfolios towards a growth bias," he added.
Shane Oliver, head of investment strategy and chief economist at AMP Capital, has a similar outlook for Australian shares. He forecasts the benchmark index at 5,800 by the end of 2014 – implying a gain of about 9 percent from current levels.
"Next year could be tough since valuations are not as cheap as they were one or two years ago," he said. "But the key point here is that we will continue to head higher as profit growth gets a boost from low interest rates."