What's going on?

Goldman Sachs recommends looking abroad to Asian stocks after being all cooped up in the house recently.

What does this mean?

Investors are getting more and more anxious that the Federal Reserve might raise interest rates in the US, which would make borrowing more expensive and stocks less attractive. That�s led to a recent sell-off in global stocks, but � according to Goldman � a buying opportunity in the form of Asia�s stocks.

There are a couple of reasons why. For one, the investment bank�s expecting the region to benefit from a strong economic rebound following the pandemic-driven slump. For another, it�s looked at similar periods in history and doesn�t think there�s likely to be another sharp move lower in the region�s stocks even if investors get antsier about interest rates. Put those factors together, and Goldman�s pencilled in a 13% upside for Asia�s stocks (excluding Japan) by the end of the year.

Why should I care?

For markets: Energy and insurance could do the best.

Goldman�s particularly keen on a couple of Asia�s sectors. First, energy companies, whose share prices have been lagging both the rising oil price and the broader Asian stock market since the depths of last year�s slump. That should make them cheaper and better placed than most to outperform in the next few months. And second, insurance companies: their stocks have been underperforming the broader market too, and higher rates should lead to higher yields on the bonds in their investment portfolios.

Zooming in: Internet stocks aren�t what they used to be.

Meanwhile, Goldman thinks Asian internet and media stocks � which have been beating the region�s wider market � look expensive. That�s especially true because their valuations tend to fall by more than their rivals when interest rates rise. That might explain why the Chinese stock market � which has been adding more and more internet stocks to its ranks � has dropped by the most of all the region�s stock markets over the last few weeks.