Don't Panic! Equity Markets to Go Higher: Goldman Sachs

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Market concerns over Federal Reserve tapering, a weak patch in global economic data and a slower than expected recovery had "inevitably" added to weakness within global markets but it was not the start of a major "pull down", Goldman Sachs' chief global equity strategist told CNBC.

"Markets don't move in a straight line, and risky assets are risky and they have some volatility to them. Our three-month target that we have suggested that markets would grow through a much flatter period but when we look out over 12 months and beyond, I think the prospects are still very good," Peter Oppenheimer told CNBC on Thursday in Warsaw.

"The weakness we've been seeing in the very recent past is not part of the start of a pull down in markets but rather a pause in a trend that's still quite positive," he said. "Equities can make really good progress in the next few years and they are in a secular upward-trending market which is something we haven't seen for a long time."

(Read More: Markets May Be Over-Reacting to Fed)

Oppenheimer's comments came as Japan's Nikkei 225 ended a volatile week on Friday with losses exceeding 6 percent amid concerns that the U.S. Federal Reserve could start tapering its bond-buying program. Still, year-to-date the index has risen almost 50 percent on the back on investor confidence in the Japanese government's aggressive moves to reverse the country's economic decline.

(Read More: Nikkei Swings Give Markets Bad Case of Deja Vu)

Oppenheimer said the prospects were still good for Japanese equities. "We are in a gradual transition of the economy through a very, very aggressive policy easing to some positive inflation and some positive growth."

"We expect the economy to be growing next year above trend at around 1.7 percent and we're looking for a very strong rise in corporate profits of about 60 percent this fiscal year, and with some positive inflation the equity market still looks relatively attractively valued given that so many companies are still trading below their book value."

Europe's Mixed Blessings

Oppenheimer said he was not "particularly optimistic for the prospects of the European economy" but added that any companies in the region with international exposure could grow on the back of increased consumption in the U.S. and emerging markets.

"We think that things are getting less bad and there'll be some form of recovery but it will be very modest," the strategist said. "But fortuitously, a lot of large and very good European companies are well levied in to a global recovery and therefore will benefit and see some improvement in corporate profitability which will justify this rise in valuations that we've seen."

(Read More: The Real Reason Why Equities Will Keep Rallying)

"But we do think that it's a rise in profitability in the corporate sector that will drive a further recovery in equity markets from here and less of the valuation expansion which has really marked the last 12 months or so."

-By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt