(Bloomberg) -- The biggest slump in Asian stocks since March hasn’t shaken the faith of strategists, who recommend buying regional cyclical shares on expectations of a strong economic rebound from the pandemic.Growth can offset rate risks, a Goldman Sachs Group Inc. team including Timothy Moe wrote in a note Monday, saying they prefer value cyclicals and short versus long duration ideas. Sanford C. Bernstein and Oanda Asia Pacific Pte see Asian stocks weathering a global surge in sovereign bond yields to stay ahead of their U.S. peers in 2021.“We stay constructive on regional equities with modest downside risk from higher rates/volatility likely to create buying opportunities on corrections,” the Goldman strategists wrote. “We would not expect as sharp an equity reaction now unless yields rise more significantly or the Fed signals changes.”Despite its 3.7% plunge on Friday, the MSCI Asia Pacific Index has outperformed the S&P 500’s advance this year by about three percentage points. Asia’s economic revival is predicted to outdo the U.S.: the region’s emerging and developing economies are poised for more than 8% growth in 2021, almost twice as fast as a basket of advanced nations including the U.S., International Monetary Fund projections show.“Asia should lead global equities this year,” said Rupal Agarwal, Asia quantitative strategist at Sanford C Bernstein in Mumbai. The region is recovering the strongest, and rising Treasury yields would be more supportive of a rotation to Asian value stocks, she said.The MSCI Asia Pacific index rose 1.2% as of 11:43 a.m. in Tokyo on Monday, taking its increase this year to 4.6%.Sovereign yields have jumped on the risk of faster inflation as economies accelerate. While higher long-term borrowing costs can dull the appeal of equities, some strategists say the U.S. is more exposed than Asia because its stock market is costlier and has more growth shares, such as technology firms.There may be some short-term downward pressure on the MSCI Asia Pacific index, but in the medium term it’s likely to outperform, said Jeffrey Halley, senior market analyst at Oanda. Unlike tech-heavy North American counterparts, Asia Pacific markets are dominated by cyclical industries, which stand to benefit from the acceleration in the global recovery, he said.‘Diversified Approach’However, the picture isn’t uniform across Asia. North Asia is the most sensitive to growth, while select Southeast Asian markets are more sensitive to rates, Goldman strategists wrote in their Monday note.They upgraded Asia’s energy and insurance sectors to overweight given the stronger reflationary backdrop, while lowering internet and media to neutral in order to trim duration risk.Over the next 12 to 18 months, earnings outlooks are likely to be boosted by a solid Asian recovery, Tai Hui, chief Asia market strategist at JPMorgan Asset Management, wrote in a note.“A more diversified approach, both in terms of geography and sector, should help investors to navigate the upcoming bout of market volatility,” he said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.