Global stocks, which already had felt much of the bad news, has suffered one of their worst first-halfs of the year since 1970 but Indian equity market is not inexpensive as yet, Citigroup said in its latest global equity strategy report.
Noting that the month of June has 'completed a painful first half for investors,' Citi equity analysts said in a research note that the global stock prices fell by 12 per cent in the first six months of this year.
It has been one of the weakest starts to the year since 1970 as concerns over undercapitalised financials sector companies, earnings risks, accelerated inflation and higher interest rates kept investors cautious, the world's biggest bank said.
"Despite a plethora of bad news, we resist the obvious temptation to turn wholesale sellers of global equities. We think that much of the bad news looks to be already in the price," the report said.
It further added that valuations indicate equities are cheap relative to history and especially cheap relative to other assets.
"Equity indices are again testing the lows achieved in January and March of this year. Stock prices retraced by 8.3 per cent in June. The pull-back makes June the 12th worst month for stock markets since 1970," it said.
Within Asia, Citigroup said that Korea, Taiwan, Thailand and Singapore look cheap at the current valuations, but "India, Indonesia and the Philippines do not".
While noting that the risk-reward is still poor at the current levels in Asia, the analysts said that only once in the past 30 years has the region escaped a lurch from peak valuations to trough that was in 1995-97, but that was a period of strong global growth and disinflation.