Experts expect the local share market to trade in a range or make only modest gains for the remainder of 2017. But there are opportunities to profit from improving conditions in global equities markets.

Michael McCarthy, chief market strategist at CMC Markets, expects the share market to trade largely sideways over the remainder of 2017, with a slight positive bias.

"The days of buying and holding and allowing the incoming tide to float share market boats is long past," he says.

However, McCarthy says gradual improvements in the local and global economy could mean the S&P; ASX 200 index reaches 6300 points by the end of the year.

"But heightened investor fears mean a rout is only a headline away, and the index may sharply correct to levels closer to 5200 before recovering," he adds.

Chris Weston, chief market strategist, IG, thinks there is a higher chance of a market correction in Australia than in global markets.

"Our banks aren't finding any love. People are speculating whether their dividends are sustainable. But if you're worried about dividends, look at their cash flow, which is still very positive," says Weston.

Brian Phelps, general manager CommSec Retail Distribution, notes the share market fell in May, whereas other major markets have risen. "We put this down to the government's tax on large banks as well as the impact of a lower oil price on the energy sector," he says.

Phelps says any significant correction in property values in Australia could have an impact on share markets, given banks fund mortgages and make up such a large percentage of the local bourse.

"Overseas factors such as Britain's exit from Europe, continuing uncertainties with the Trump administration, geopolitical tensions with North Korea and ongoing terrorism concerns could also dampen markets," he says.

Matt Sherwood, head of investment strategy, Perpetual Investments – multi asset, says overheated valuations and muted earnings are usually the precursor to a market correction.

"With modest economic growth, credit growth at mid-single digit levels and commodity prices coming off recent peak, it is no surprise Australia's 12-month earnings per share outlook has been downgraded from 12 per cent at the end of last year to 7 per cent now," he says.

Sherwood attributes this to the recent decline in the Australian share market. "As the soft economy has been factored into markets, further share price slippage will likely be as a result of weaker domestic or international growth or a more aggressive US Federal Reserve. Any of these could spark either lower valuations or declining earnings per share expectations."

Perpetual's base case for 2017 is that the Australian share market will lag its international peers this year. He says European and Japanese shares could give investors better exposure to the global reflation trade.

The great unknown in global equities is the ability of the US administration to drive economic change.

Investors are waiting for US President Donald Trump to announce plans to cut taxes, as well as measures to boost infrastructure spending globally. "If these are realised then share markets more generally across the globe will benefit," says Phelps.

Locally, any sign of an improving economy could translate to a stronger local market. Additionally, should commodity prices hold or rise, this will help local miners' fortunes, pushing the local market higher.

"Government initiatives to boost small- to medium-sized businesses, along with improved corporate earnings, could see our market progress," says Phelps.

However, Sherwood says as Australian equities market valuations are already fair, the next leg up for markets from here is most likely to come from earnings.

"Earning per share growth needs revenue growth and this requires higher economic growth. But the economy is lacklustre, supported by temporary factors like rising inventories and a lower savings rate, which are not sustainable. Add to this a painfully resilient currency, an on-hold RBA and a government implementing mild austerity and it's hard to pinpoint a likely domestic source that would trigger a sustained market rally.

"Accordingly, most people are likely to turn their attention to regional markets where the initial optimism about President Trump's election agenda has been priced out. If any of his major plans were to become legislated it would boost sentiment and prices. But Trump is struggling with the US Congress, so any reform is likely to be heavily watered down and unlikely to be implemented until 2018," he says.

Any improvement in the Chinese economy could also drive markets, but if higher debt levels fuel this, it could create more risk for investors in the long-term.

"The world is massively indebted, growth is soft and valuations are high and I can't see markets rallying strongly in such an environment and Australia is no exception to this rule," Sherwood says.

Consequently, with so much happening on the local and global stage, choppy conditions are likely to continue in share markets.

At home, investors are waiting to see the impact of the bank levy on profits and dividends. "We believe the ASX200 index may end the year around 5800 to 5900 points," says Phelps.

"Given the recent pull back in May, there is an opportunity for our market to trade back to 5900 to 5950 points by year's end. With GDP figures expected to increase, unemployment predicted to remain low and the cash rate to remain stable, I see a steady run into the first and second quarter of 2018," he says.

Sherwood is more circumspect. He says against a backdrop of modest improvement to share prices and below-average earnings prospects, a major share price re-rating will be tough.

"The best we can hope for is a sideways trend for the remainder of 2017. I don't see a large amount of upside as valuations seems capped. The composition of sectors in the Australian economy, which served investors very well during the China boom days, is now subject to notable headwinds," he says.

Perpetual expects domestic economic growth to remain at about 2.5 per cent, which is relatively good compared to other advanced economies

"But the impact on earnings per share growth will be less than the 2 per cent advanced economy growth expected elsewhere. Given lofty earnings expectations globally and elevated valuations, we expect regions with large spare capacity to outperform. Europe has oodles of it, Australia has a bit and the US has none, and these views are reflected in our asset allocations," Sherwood says.