These are the stock markets Goldman likes

Veejay Villafranca | Bloomberg | Getty Images

Asian equities have had a poor start to the new year, weighed down by a sell-off in China that sparked fresh concerns of an economic slowdown in the mainland as well as weakness in the yuan.

But what about the outlook for rest of the year?

As an important trading partner to much of the region, any sharp weakness in Chinese equities can "ripple through to other markets", according to Goldman Sachs.

Therefore, it's no surprise that Goldman Sachs suggests underweight positions in markets where a) companies have sizable revenue exposure to China and b) the correlation with Chinese equities is pretty high - mostly markets in North Asia.

Instead, the bank prefers markets where the 'trend growth potential' is higher.

Here are the likely winners and laggards, according to Goldman Sachs:

Winners

India

With gross domestic product (GDP) forecast to grow 7.8 percent on-year, India is the fastest growing major economy in the region. With the Indian government's continued push to turn India into a manufacturing hub, through its Make In India initiative, and inflation rates hovering within the Reserve Bank of India's target range, experts remain positive on the country's economic outlook.

Goldman Sachs forecasts the Nifty index, comprising 50 stocks from over 20 sectors, to return 16 percent for the year in dollar terms. Returns data for 2015 in dollar terms were not immediately available, according to the bank.

Last year, the Nifty index declined by 4 percent in rupee terms.

Indonesia

Though lower oil prices dented Indonesia's export revenues and the currency in 2015, Goldman forecasts the country's economy to grow 5.2 percent in 2016, with annual inflation projected at 5.5 percent. While Indonesia's budget deficit has widened, Goldman notes that the rise was largely due to higher government spending to boost infrastructure, a positive for economic growth.

The Jakarta Composite Index (JCI) is expected to return 10 percent in dollar terms for the year.

The JCI was down 12 percent for the year in 2015.

The Philippines

The Philippines, along with other emerging markets in Asia, saw outflows to the tune of $9 billion in equities last year but the bank still expects the Philippines Stock Exchange PSEi Index (PCOMP) to return 14 percent in dollar terms for 2016. The country is also expected to see a comparatively high growth rate of 6 percent.

Losers

South Korea

The country is one of the top 10 exporters in the world with significant trade linkages to China. Last year, South Korea struggled as exports slumped 7.9 percent on year while imports fell 19.2 percent. The drop in trade was the steepest since 2009.

Goldman said credit growth will likely decelerate in Korea, which in turn will have an impact on earnings. The bank expects the Kospi to return about 6 percent in dollar terms this year, while the economy is estimated to grow 2.9 percent on-year. The Kospi finished 2.33 percent higher in 2015.

Hong Kong

One of the biggest impacts of China's economic slowdown was on Hong Kong as the special administrative region relies heavily on trade with the mainland.

For example, its retail sales fell for a ninth consecutive month in November, the longest period of decline in 13 years. It was largely due to the fall in the number of mainland Chinese tourists visiting the city.

Goldman said Hong Kong's prospect remains dim with GDP expected to grow by 1.6 percent on-year. The bank expects the MSCI Hong Kong Index to return 4 percent in dollar terms for 2016.

In 2015, the index finished 3.31 percent lower.

Thailand

A history of military coups has kept the focus of Thailand's policymakers on political stability rather than foreign investment. Despite Thailand's relatively limited exposure to China, the country's GDP is expected to grow only 2.9 percent in 2016.

Goldman expects the Stock Exchange of Thailand (SET) index to return zero percent in dollar terms for 2016.

Malaysia

A combination of low oil prices and the ongoing scandal involving a state-owned fund has kept investor confidence low in the market.

Goldman expects growth in Malaysia to be at 4.7 percent on-year and a negative 7 percent return for the FTSE Bursa Malaysia KLCI index in 2016.

— Follow CNBC International on Twitter and Facebook.