Kiran

MUMBAI: Asian stocks are unlikely to take off in the next two years as earnings expectations and inflation sweeping regional economies remain high, Merrill Lynch's chief Asia equity strategist said on Friday.

But falling crude, expected to touch $110 by the year end, may trigger short-term rallies in share prices, Merrill Lynch's Mark Matthews said in a mid-year review for Asia.

"We are probably in for a couple of years of just nothing. Not good or bad but just nothing," he said. "I don't think we are imminently poised for a collapse but I also don't think we are on the verge of a secular bull market in Asia for at least another two years," he told a media briefing in Mumbai.

While inflation sweeping the region remains a concern, a 16 percent earnings growth expectation for Asia was high. "That probably needs to come down given that it's almost for sure the US economy will have another write down," Matthews, who assumed his job at roughly the same time as the credit crisis erupted last year, said.