The recent panic selling of Asian stocks on fears of a possible euro zone break up is almost over with most indices in the region having bottomed out, says one analyst, who recommends buying now as central banks are likely to start pumping liquidity into the financial markets soon.

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It is when everyone is "panicking" that central banks will likely add liquidity into the financial system to prop up markets," Ajay Kapur, Head of Equity Strategy for Deutsche Bank in Asia, told CNBC Asia`s"Squawk Box" on Monday.

He added that a lot of the region`s stock markets especially in China and India had corrected "significantly" and will emerge stronger in the second half of the year.

"Some of the cyclical sectors in the last three months in Asia are down between 10 and 20%," he said. "I think China and India, in our view both bottomed out in the first quarter."

The Shanghai Composite Index has declined more than 5% from its 2012 high achieved on March 2, while India`s benchmark Sensex has lost 11.4%of its value since its February 21 peak.

Further weak trade, retail sales and bank lending numbers out of China in April are adding pressure on the central bank to ease policy to stimulate the economy.

"Things are pretty tight there in terms of liquidity. So I think that`s going to be able to generate some sort of monetary stimulus," he added.

In the meantime, the European Central Bank is also expected to step in and print more money if the second Greek elections on June 17 see the anti-bailout parties form a government. "It is only during these panics that policymakers also panic and begin to reflate," Kapur said.

By CNBC`s Jean Chua.

Copyright 2011 cnbc.com

First Published:May 29, 2012 9:00 AM IST