The valuation of Asian shares surged to a 10-1/2-year high in June, tracking a rally in global stocks, as upbeat U.S. and China data renewed hopes of a swift economic recovery, offsetting concerns over rising coronavirus cases.

The MSCI's broadest index of Asia-Pacific shares <.MIAP00000PUS> gained 4.83% last month, topping the MSCI's World index's <.MIWD00000PUS> 3.03% gains.

Thanks to the rally, the index's forward price-to-earnings (P/E) ratio rose to 15.62 at the end of June, compared with 14.34 a month earlier. This was the index's highest forward P/E ratio since December 2009, according to Refinitiv-Eikon data.

Benchmark equity indexes in India, Hong Kong, the Philippines and Taiwan, gained more than 6% each last month.

New Zealand, India and Malaysia shares were the most expensive in the region, with P/E ratios of 30.7, 19.3 and 17.4, respectively.

Graphic: Asia-Pacific equities performance in June 2020 https://fingfx.thomsonreuters.com/gfx/mkt/qmyvmgbbqvr/Asia%20Pacific%20equities%20performance%20in%20June%202020.jpg

Graphic: Asia-Pacific equities' performance in 2020

Graphic: Valuation of Asia-Pacific equities

Graphic: MSCI Asia and World index's PE

"Equity market bulls are looking past the current economic gloom despite not being out of the woods, and being emboldened by the flood of ultra-cheap money," Vishnu Varathan, head of economics and strategy at Mizuho Bank, said in a note.

"Insofar that liquidity, not fundamentals, determines market buoyancy, we must brace for higher latent volatility."

Asian shares scaled four-month peaks on Monday as investors counted on a revival in Chinese activity to sustain global economic growth, even as surging coronavirus cases delayed re-openings across the United States.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Rashmi Aich)