BENGALURU (Reuters) - India's benchmark indices will hit new highs by end-2024, according to a Reuters poll of equity analysts who have upgraded their outlook from three months ago, as retail investors plough money into one of the world's most expensive stock markets.

Despite growing concerns that India's equity markets are overvalued, local investors have so far ignored warnings and driven share prices to record highs over optimism that India's economy will continue to outpace its peers.

The benchmark BSE Sensex index, which gained nearly 19% in 2023 and has risen over 2% for the year, was forecast to add another 8% to reach 80,120 by end-2024, the May 14-22 poll of 26 equity analysts showed.

It was then expected to add another 4% to reach 83,300 by mid-2025. Those estimates were an upgrade from median predictions of 78,550 and 80,920 in a February poll.

"Though the pace of advance has been muted in the last 4-5 months, the overall bias and trend still looks positive... earlier we were seeing mixed signals from global markets, but now the majority of them are also doing well," said Ajit Mishra at stockbroker Religare.

"Overall we are expecting the market to reach further (highs) though...the pace would be gradual. We might not see any major correction."

The Indian economy was forecast to have grown over 7% in the fiscal year 2023-24, with growth expected to moderate only slightly to 6.5% and 6.7% over the next couple of years, according to a separate Reuters poll.

The Sensex has risen in nine of the past 10 years, including the pandemic period. Even with a high price-to-earnings ratio of 24, a correction in the near-term was still not the majority view.

The Nifty 50 was expected to gain 6% from Tuesday's close of 22,529 to reach 23,850 by the end of 2024, and 24,750 by mid-2025.

Only half of the 24 respondents who answered an additional question said a correction in the next three months was likely with the rest saying unlikely.

"Right now the market is relatively expensive compared to what growth is telling us. Domestically liquidity was strong but foreigners are taking a cautious stance," said Rajat Agarwal, Asia equity strategist at Societe Generale.

"So it should be more of a year of resilience for the Indian equity market rather than a year of good returns overall."

Most political analysts expect Prime Minister Narendra Modi's Bharatiya Janata Party to win a rare third five-year term in national elections that will soon conclude, with results published in the first week of June.

Agarwal said if there was any disruption to those broad expectations "we should...see some kind of a correction."

(Other stories from the Reuters Q2 global stock markets poll package:)

(Reporting by Devayani Sathyan; Polling by Susobhan Sarkar and Anant Chandak; Editing by Vivek Mishra, Hari Kishan, William Maclean)

By Devayani Sathyan