Taking stock of a tough first half for equities

A sharp sell-off over the past few days has capped a tough first half of the year for the region’s equity markets. The good news is that valuations now look cheap, pointing to a period of outperformance once appetite for riskier assets starts to recover. The bad news is that this is unlikely to be for a while. Market volatility is likely to remain high over the next six months or so, but we expect the general trend to remain down.